☐ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☒ |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2014 |
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________________________________________________ to ____________________________________________________________ |
☐ |
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of event requiring this shell company report |
EUROSEAS LTD.
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(Exact name of Registrant as specified in its charter)
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(Translation of Registrant's name into English)
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Marshall Islands
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(Jurisdiction of incorporation or organization)
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4 Messogiou & Evropis Street, 151 24 Maroussi Greece
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(Address of principal executive offices)
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Tasos Aslidis, Tel: (908) 301-9091,
euroseas@euroseas.gr
, Euroseas Ltd. c/o Tasos Aslidis,
11 Canterbury Lane, Watchung, NJ 07069
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(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check one)
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||
Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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☐ | ☐ | ☒ |
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
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☒ |
U.S. GAAP
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☐ |
International Financial Reporting Standards as issued by the International Accounting Standards Board.
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☐ |
Other
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If "Other" has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow
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☐Item 17 ☐Item 18
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If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
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Yes ☐ No ☒
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(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
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Indicate by check mark whether the registrant has filed all documents and reports to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
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Yes ☐ No ☐
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Page
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Forward-Looking Statements
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1
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Item 1.
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Identity of Directors, Senior Management and Advisers
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2
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Item 2.
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Offer Statistics and Expected Timetable
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2
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Item 3.
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Key Information
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2
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Item 4.
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Information on the Company
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37
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Item 4A.
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Unresolved Staff Comments
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55
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Item 5.
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Operating and Financial Review and Prospects
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55
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Item 6.
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Directors, Senior Management and Employees
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69
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Item 7.
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Major Shareholders and Related Party Transactions
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75
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Item 8.
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Financial Information
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79
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Item 9.
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The Offer and Listing
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80
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Item 10.
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Additional Information
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81
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Item 11.
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Quantitative and Qualitative Disclosures About Market Risk
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93
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Item 12.
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Description of Securities Other than Equity Securities
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95
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Item 13.
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Defaults, Dividend Arrearages and Delinquencies
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96
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Item 14.
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Material Modifications to the Rights of Security Holders and Use of Proceeds
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96
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Item 15.
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Controls and Procedures
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96
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Item 16A.
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Audit Committee Financial Expert
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98
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Item 16B.
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Code of Ethics
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98
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Item 16C.
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Principal Accountant Fees and Services
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99
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Item 16D.
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Exemptions from the Listing Standards for Audit Committees
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99
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Item 16E.
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Purchases of Equity Securities by the Issuer and Affiliated Purchasers
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99
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Item 16F.
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Change in Registrant's Certifying Accountant
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99
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Item 16G.
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Corporate Governance
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99
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Item 16H.
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Mine Safety Disclosure
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100
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Item 17.
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Financial Statements
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101
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Item 18.
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Financial Statements
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101
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Item 19.
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Exhibits
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101 | |
· | our future operating or financial results; |
· | future, pending or recent acquisitions, joint ventures, business strategy, areas of possible expansion, and expected capital spending or operating expenses; |
· | drybulk and container shipping industry trends, including charter rates and factors affecting vessel supply and demand; |
· | our financial condition and liquidity, including our ability to obtain additional financing in the future to fund capital expenditures, acquisitions and other general corporate activities; |
· | availability of crew, number of off-hire days, drydocking requirements and insurance costs; |
· | our expectations about the availability of vessels to purchase or the useful lives of our vessels; |
· | our expectations relating to dividend payments and our ability to make such payments; |
· | our ability to leverage to our advantage our manager's relationships and reputations in the drybulk and container shipping industry; |
· | changes in seaborne and other transportation patterns; |
· | changes in governmental rules and regulations or actions taken by regulatory authorities; |
· | potential liability from future litigation; |
· | global and regional political conditions; |
· | acts of terrorism and other hostilities, including piracy; and |
· | other factors discussed in the section titled "Risk Factors." |
Item 1. | Identity of Directors, Senior Management and Advisers |
Item 2. | Offer Statistics and Expected Timetable |
Item 3. | Key Information |
A. | Selected Financial Data |
Euroseas Ltd. – Summary of Selected Historical Financials
(in US Dollars except for Fleet Data and number of shares)
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||||||||||||||||||||
Year Ended December 31,
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||||||||||||||||||||
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2010
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2011
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2012
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2013
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2014
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|||||||||||||||
Income Statement Data
|
||||||||||||||||||||
Voyage revenues
|
54,422,489
|
64,129,511
|
54,921,697
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40,850,051
|
42,586,963
|
|||||||||||||||
Related party revenue
|
-
|
240,000
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240,000
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240,000
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240,000
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|||||||||||||||
Commissions
|
(1,944,473
|
)
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(2,972,967
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)
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(2,673,703
|
)
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(1,936,381
|
)
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(2,192,626
|
)
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||||||||||
Net revenue
|
52,478,016
|
61,396,544
|
52,487,994
|
39,153,670
|
40,634,337
|
|||||||||||||||
Voyage expenses
|
(1,596,569
|
)
|
(777,902
|
)
|
(1,329,668
|
)
|
(1,537,898
|
)
|
(3,963,181
|
)
|
||||||||||
Vessel operating expenses
|
(21,507,192
|
)
|
(26,249,339
|
)
|
(25,075,139
|
)
|
(25,191,250
|
)
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(25,279,087
|
)
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||||||||||
Drydocking expenses
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(6,537,733
|
)
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(3,148,111
|
)
|
(1,616,425
|
)
|
(3,816,699
|
)
|
(1,975,590
|
)
|
||||||||||
Vessel depreciation
(1)
|
(17,979,750
|
)
|
(18,348,556
|
)
|
(17,385,608
|
)
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(19,983,772
|
)
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(12,137,445
|
)
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||||||||||
Related party management fees
|
(4,892,006
|
)
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(5,810,095
|
)
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(4,984,098
|
)
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(4,891,024
|
)
|
(4,894,559
|
)
|
||||||||||
Other general and administration expenses
|
(3,026,941
|
)
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(2,986,507
|
)
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(3,661,426
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)
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(3,542,619
|
)
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(3,514,636
|
)
|
||||||||||
Impairment loss
|
-
|
-
|
-
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(78,207,462
|
)
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(3,500,000
|
)
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|||||||||||||
Net loss on sale of vessels
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-
|
-
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(8,568,234
|
)
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(1,935,019
|
)
|
-
|
|||||||||||||
Other operating income
|
2,352,946
|
735,707
|
254,604
|
-
|
-
|
|||||||||||||||
Operating income / (loss)
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(709,229
|
)
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4,811,741
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(9,878,000
|
)
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(99,952,073
|
)
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(14,630,161
|
)
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|||||||||||
Interest and other financing costs
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(1,498,216
|
)
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(2,191,235
|
)
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(1,977,226
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)
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(1,845,776
|
)
|
(2,152,187
|
)
|
||||||||||
Interest income
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538,820
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248,892
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484,886
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387,292
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422,240
|
|||||||||||||||
Equity loss in joint venture
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(538,833
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)
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(2,415
|
)
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(1,219,692
|
)
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(2,023,191
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)
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(2,541,775
|
)
|
||||||||||
Other (loss) / income
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(4,398,392
|
)
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(1,750,994
|
)
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(608,709
|
)
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8,921
|
982,978
|
||||||||||||
Dividend Series B preferred shares
(5)
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-
|
-
|
-
|
-
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(1,440,100
|
)
|
||||||||||||||
Net (loss) / income attributable to common shareholders
(5)
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(6,605,850
|
)
|
1,115,989
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(13,198,741
|
)
|
(103,424,827
|
)
|
(19,359,005
|
)
|
|||||||||||
As of December 31,
|
||||||||||||||||||||
Balance Sheet Data
|
2011
|
2012
|
2013
|
2013
|
2014
|
|||||||||||||||
Current assets
|
46,404,826
|
38,877,587
|
45,070,412
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16,951,998
|
30,847,380
|
|||||||||||||||
Vessels, net
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255,412,434
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237,063,878
|
206,934,746
|
105,463,737
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111,150,227
|
|||||||||||||||
Deferred assets and other long term assets
|
5,399,374
|
5,747,951
|
9,318,578
|
7,572,753
|
8,035,621
|
|||||||||||||||
Investment in joint venture
|
14,461,167
|
14,458,752
|
16,989,061
|
21,215,870
|
18,674,094
|
|||||||||||||||
Total assets
|
321,677,801
|
296,148,168
|
278,312,797
|
156,616,354
|
190,578,612
|
|||||||||||||||
Current liabilities including current portion of long term debt
|
25,214,542
|
21,101,011
|
27,367,521
|
18,812,413
|
25,190,229
|
|||||||||||||||
Long term debt, including current portion
|
88,385,000
|
74,913,000
|
61,581,000
|
45,644,000
|
54,257,000
|
|||||||||||||||
Total liabilities
|
102,982,809
|
84,226,420
|
68,686,651
|
51,914,272
|
59,936,008
|
|||||||||||||||
Preferred shares
(5)
|
-
|
-
|
-
|
-
|
30,440,100
|
|||||||||||||||
Common shares outstanding
(4, 6)
|
31,002,211
|
31,167,211
|
45,319,605
|
45,723,255
|
57,157,313
|
|||||||||||||||
Share capital
|
930,067
|
935,017
|
1,359,586
|
1,371,698
|
1,714,720
|
|||||||||||||||
Total shareholders' equity
|
218,694,992
|
211,921,748
|
209,626,146
|
104,702,082
|
100,202,504
|
|||||||||||||||
Year Ended December 31,
|
||||||||||||||||||||
|
2010
|
2011
|
2012
|
2013
|
2014
|
|||||||||||||||
Net cash (used in) / provided by investing activities
|
(29,206,844
|
)
|
1,896,435
|
(3,505,057
|
)
|
(7,879,468
|
)
|
(37,092,981
|
)
|
|||||||||||
Net cash provided by / (used in) financing activities
|
9,746,824
|
(22,282,763
|
)
|
(2,837,952
|
)
|
(18,127,144
|
)
|
51,834,441
|
Earnings / (loss) per share, basic and diluted
(4, 6)
|
(0.21
|
)
|
0.04
|
(0.34
|
)
|
(2.28
|
)
|
(0.35
|
)
|
|||||||||||
Common stock dividends declared
|
6,848,536
|
8,457,722
|
4,437,984
|
2,067,570
|
-
|
|||||||||||||||
Cash dividends declared per common share
(4)
|
0.22
|
0.27
|
0.125
|
0.045
|
-
|
|||||||||||||||
Preferred stock dividends declared
(5)
|
-
|
-
|
-
|
-
|
1,440,100
|
|||||||||||||||
Preferred dividends declared per preferred share
(5)
|
-
|
-
|
-
|
-
|
44.81
|
|||||||||||||||
Weighted average number of shares outstanding during period, basic
(4, 6)
|
31,636,633
|
31,794,381
|
38,950,100
|
45,442,841
|
54,794,181
|
|||||||||||||||
Weighted average number of shares outstanding during period, diluted
(4, 6)
|
31,636,633
|
31,846,080
|
38,950,100
|
45,442,841
|
54,794,181
|
2010
|
2011
|
2012
|
2013
|
2014
|
||||||||||||||||
Fleet Data
(2)
|
||||||||||||||||||||
Number of vessels
|
15.53
|
16.00
|
15.21
|
14.56
|
14.60
|
|||||||||||||||
Calendar days
|
5,669
|
5,840
|
5,566
|
5,313
|
5,330
|
|||||||||||||||
Available days
|
4,953
|
5,700
|
5,521
|
5,185
|
5,245
|
|||||||||||||||
Voyage days
|
4,914
|
5,497
|
5,280
|
4,961
|
5,126
|
|||||||||||||||
Utilization Rate (percent)
|
99.2
|
%
|
96.4
|
%
|
95.6
|
%
|
95.7
|
%
|
97.7
|
%
|
||||||||||
(In U.S. dollars per day per vessel)
|
||||||||||||||||||||
Average TCE rate
(3)
|
11,201
|
11,525
|
10,155
|
7,945
|
7,534
|
|||||||||||||||
Vessel Operating Expenses
|
3,794
|
4,495
|
4,507
|
4,741
|
4,740
|
|||||||||||||||
Management Fees
|
863
|
995
|
895
|
921
|
919
|
|||||||||||||||
G&A Expenses
|
534
|
511
|
657
|
639
|
663
|
|||||||||||||||
Total Operating Expenses excluding drydocking expenses
|
5,191
|
6,001
|
6,058
|
6,301
|
6,320
|
|||||||||||||||
Drydocking expenses
|
1,153
|
539
|
290
|
718
|
372
|
2010
|
2011
|
2012
|
2013
|
2014
|
||||||||||||||||
(In U.S. dollars, except for voyage days and TCE rates which are expressed in U.S. dollars per day)
|
||||||||||||||||||||
Voyage revenues
|
54,422,489
|
64,129,511
|
54,921,697
|
40,850,051
|
42,586,963
|
|||||||||||||||
Loss of hire insurance income
(*)
|
2,214,179
|
-
|
-
|
-
|
-
|
|||||||||||||||
Voyage expenses
|
(1,596,569
|
)
|
(777,902
|
)
|
(1,329,668
|
)
|
(1,537,898
|
)
|
(3,963,181
|
)
|
||||||||||
Time Charter Equivalent or TCE Revenues
|
55,040,099
|
63,351,609
|
53,592,029
|
39,312,153
|
38,623,782
|
|||||||||||||||
Voyage days
(*)
|
4,914
|
5,497
|
5,280
|
4,961
|
5,126
|
|||||||||||||||
Average TCE rate
(*)
|
11,201
|
11,525
|
10,155
|
7,924
|
7,534
|
B. | Capitalization and Indebtedness |
C. | Reasons for the Offer and Use of Proceeds |
D. | Risk Factors |
|
·
|
supply of, and demand for, drybulk commodities and containerized cargo;
|
|
·
|
changes in the exploration or production of energy resources, commodities, semi-finished and finished consumer and industrial products, and the resulting changes in the international pattern of trade;
|
|
·
|
global and regional economic and political conditions, including armed conflicts and terrorist activities;
|
|
·
|
embargoes and strikes;
|
·
|
the location of regional and global exploration, production and manufacturing facilities;
|
|
|
·
|
availability of credit to finance international trade;
|
|
·
|
the location of consuming regions for energy resources, commodities, semi-finished and finished consumer and industrial products;
|
|
·
|
the distance drybulk and containerized commodities are to be moved by sea;
|
|
·
|
environmental and other regulatory developments;
|
|
·
|
currency exchange rates;
|
|
·
|
changes in global production and manufacturing distribution patterns of finished goods that utilize drybulk and other containerized commodities;
|
|
·
|
changes in seaborne and other transportation patterns; and
|
|
·
|
weather and other natural phenomena.
|
|
·
|
the number of newbuilding deliveries;
|
|
·
|
the scrapping rate of older vessels;
|
|
·
|
the price of steel and other materials;
|
|
·
|
port and canal congestion;
|
|
·
|
changes in environmental and other regulations that may limit the useful life of vessels;
|
|
·
|
vessel casualties;
|
|
·
|
the number of vessels that are out of service; and
|
·
|
changes in global commodity production.
|
|
·
|
general economic and market conditions affecting the shipping industry in general;
|
|
·
|
supply of drybulk and container vessels, including newbuildings;
|
|
·
|
demand for drybulk and container vessels;
|
|
·
|
types and sizes of vessels;
|
|
·
|
scrap values;
|
·
|
other modes of transportation;
|
|
|
·
|
cost of newbuildings;
|
|
·
|
technological advances;
|
·
|
new regulatory requirements from governments or self-regulated organizations;
|
|
|
·
|
competition from other shipping companies; and
|
·
|
prevailing level of charter rates.
|
|
·
|
locating and acquiring suitable vessels;
|
|
·
|
identifying and consummating acquisitions or joint ventures;
|
|
·
|
integrating any acquired business successfully with our existing operations;
|
|
·
|
enhancing our customer base;
|
|
·
|
managing our expansion; and
|
|
·
|
obtaining required financing on acceptable terms.
|
·
|
incur additional indebtedness;
|
|
·
|
create liens on our assets;
|
|
·
|
sell capital stock of our subsidiaries;
|
·
|
make investments;
|
|
·
|
engage in mergers or acquisitions;
|
|
·
|
pay dividends;
|
|
·
|
make capital expenditures;
|
|
·
|
change the management of our vessels or terminate or materially amend the management agreement relating to each vessel; and
|
|
·
|
sell our vessels.
|
• | work stoppages or other hostilities, political or economic disturbances that disrupt the operations of the shipyard; |
• | quality or engineering problems; |
• | bankruptcy or other financial crisis of the shipyard; |
• | a backlog of orders at the shipyard; |
• | disputes between us and the shipyard regarding contractual obligations; |
• | weather interference or catastrophic events, such as major earthquakes or fires; |
• | our requests for changes to the original vessel specifications or disputes with the shipyard; or |
• | shortages of or delays in the receipt of necessary construction materials, such as steel, or equipment, such as main engines, electricity generators and propellers. |
·
|
marine disaster;
|
|
·
|
piracy;
|
|
·
|
environmental accidents;
|
|
·
|
grounding, fire, explosions and collisions;
|
|
·
|
cargo and property losses or damage;
|
|
·
|
business interruptions caused by mechanical failure, human error, war, terrorism, political action in various countries, labor strikes or adverse weather conditions; and
|
|
·
|
work stoppages or other labor problems with crew members serving on our vessels including crew strikes and/or boycotts.
|
·
|
actual or anticipated fluctuations in quarterly and annual variations in our results of operations;
|
|
·
|
changes in market valuations or sales or earnings estimates or publication of research reports by analysts;
|
|
·
|
changes in earnings estimates or shortfalls in our operating results from levels forecasted by securities analysts;
|
·
|
speculation in the press or investment community about our business or the shipping industry;
|
|
·
|
changes in market valuations of similar companies and stock market price and volume fluctuations generally;
|
|
·
|
payment of dividends;
|
|
·
|
strategic actions by us or our competitors such as mergers, acquisitions, joint ventures, strategic alliances or restructurings;
|
|
·
|
changes in government and other regulatory developments;
|
|
·
|
additions or departures of key personnel;
|
|
·
|
general market conditions and the state of the securities markets; and
|
|
·
|
domestic and international economic, market and currency factors unrelated to our performance.
|
Item 4. | Information on the Company |
A. | History and Development of the Company |
B. | Business Overview |
Name
|
Type
|
Dwt
|
TEU
|
Year Built (*)
|
Employment (**)
|
TCE Rate ($/day)
|
Dry Bulk Vessels
|
|
|
|
|
|
|
EIRINI P
|
Panamax
|
76,466
|
2004
|
TC until Nov-15
|
Hire 103% of Average BPI 4TC
|
|
PANTELIS
|
Panamax
|
74,020
|
2000
|
Ongoing TC with mutual 2 months notice
|
105% of average BPI 4TC
|
|
ELENI P
|
Panamax
|
72,119
|
1997
|
TC until Jan-16
|
Hire 97% of Average BPI 4TC
|
|
ARISTIDES N.P.
|
Panamax
|
69,268
|
1993
|
TC until May-15
|
$4,000 for the first 65 days and $6,000 thereafter
|
|
MONICA P
|
Handymax
|
46,667
|
1998
|
Open
|
$5,500 for the first 60 days, then $10,100
|
|
Vessels under construction (*)
|
||||||
Hull Number DY 160
|
Ultramax
|
63,500
|
Fourth
Quarter
2015
|
N/A
|
||
Hull Number DY 161
|
Ultramax
|
63,500
|
2016
|
N/A
|
||
Hull Number YZJ 1116
|
Kamsarmax
|
82,000
|
Fourth
Quarter
2015
|
4 years TC starting at delivery + 1 year at charterer's option
|
$14,100
Option @ $14,350
|
|
Hull Number YZJ 1153
|
Kamsarmax
|
82,000
|
2016
|
N/A
|
||
Total Dry Bulk Vessels
|
9
|
629,540
|
||||
Container Carriers
|
||||||
EVRIDIKI G (ex-MAERSK NOUMEA)
|
Intermediate
|
34,677
|
2,556
|
2001
|
TC until Aug-15 + 6 months at charterer's option
|
$10,750
Option @ $13,500
|
TIGER BRIDGE
|
Intermediate
|
31,627
|
2,228
|
1990
|
TC until Oct-15
|
$7,500
|
AGGELIKI P
|
Intermediate
|
30,360
|
2,008
|
1998
|
TC until Sep-15
|
$9,800
|
DESPINA P
|
Handy size
|
33,667
|
1,932
|
1990
|
TC until Nov-15
|
$9,500
|
CAPTAIN COSTAS
(ex-OEL TRANSWORLD)
|
Handy size
|
30,007
|
1,742
|
1992
|
TC until Jun-15
|
$7,750
|
MARINOS
|
Handy size
|
23,596
|
1,599
|
1993
|
TC until Mar -15
|
$6,500
|
JOANNA
|
Handy size
|
22,301
|
1,732
|
1999
|
TC until Apr-15
|
$7,250
|
MANOLIS P
|
Handy size
|
20,346
|
1,452
|
1995
|
TC until Sep-15
|
$7,300
|
NINOS
|
Feeder
|
18,253
|
1,169
|
1990
|
TC until Jun-15
|
$8,400
|
KUO HSIUNG
|
Feeder
|
18,154
|
1,169
|
1993
|
TC until Jul-15
|
$8,700
|
Total Container Carriers
|
10
|
262,988
|
17,587
|
|||
Fleet Grand Total
|
19
|
892,528
|
17,587
|
(*) |
For newbuilding contracts, it represents the expected year and quarter of delivery in respect of vessels to be delivered in 2015.
|
(**) | TC denotes time charter. All dates listed are the earliest redelivery dates under each TC. |
|
·
|
reports by industry analysts and data providers that focus on our industry and related dynamics affecting vessel values;
|
|
·
|
news and industry reports of similar vessel sales;
|
|
·
|
news and industry reports of sales of vessels that are not similar to our vessels where we have made certain adjustments in an attempt to derive information that can be used as part of our estimates;
|
|
·
|
approximate market values for our vessels or similar vessels that we have received from shipbrokers, whether solicited or unsolicited, or that shipbrokers have generally disseminated;
|
|
·
|
offers that we may have received from potential purchasers of our vessels; and
|
|
·
|
vessel sale prices and values of which we are aware through both formal and informal communications with shipowners, shipbrokers, industry analysts and various other shipping industry participants and observers.
|
Name
|
Capacity
|
Purchase Date
|
Carrying Value as of December 31, 2013
|
Carrying Value as of December 31, 2014
|
Dry Bulk Vessels
|
(dwt)
|
(million USD)
|
(million USD)
|
|
PANTELIS
|
74,020
|
Jul-2009
|
$20.34
(1)
|
$18.73
(2)
|
ELENI P
|
72,119
|
Mar-2009
|
$12.43
(1)
|
$11.18
(2)
|
EIRINI P
|
76,466
|
May-2014
|
-
|
$20.60
(2)
|
ARISTIDES N.P.
|
69,268
|
Sep-2006
|
$10.45
(1)
|
$5.09
(4)
|
MONICA P
|
46,667
|
Jan-2009
|
$12.48
(1)
|
$11.35
(2)
|
Total Dry Bulk Vessels
|
338,540
|
$55.70
|
$66.95
|
|
Container Carriers
|
(teu)
|
|||
EVRIDIKI
|
2,556
|
May-2008
|
$13.00
(3)
|
$12.18
(2)
|
TIGER BRIDGE
|
2,228
|
Oct-2007
|
$3.75
(3)
|
$2.87
|
AGGELIKI P
|
2,008
|
Jun-2010
|
$7.50
(3)
|
$6.94
|
DESPINA P
|
1,932
|
Aug-2007
|
$3.85
(3)
|
$3.02
|
CAPTAIN COSTAS
|
1,742
|
Jun-2007
|
$3.75
(3)
|
$3.28
|
MARINOS
|
1,599
|
Nov-2006
|
$2.95
(3)
|
$2.64
|
MANOLIS P
|
1,452
|
Apr-2007
|
$3.75
(3)
|
$3.42
|
NINOS
|
1,169
|
Feb-2001
|
$2.65
(3)
|
$1.96
|
JOANNA
|
1,732
|
Jul-2013
|
$5.81
|
$5.41
|
KUO HSIUNG
|
1,169
|
May-2002
|
$2.75
(3)
|
$2.48
|
Total Container Carriers
|
17,587
|
$49.76
|
$44.20
|
|
Fleet Total
|
$105.46
|
$111.15
|
· | Experienced Management Team . Our management team has significant experience in all aspects of commercial, technical, operational and financial areas of our business. Aristides J. Pittas, our Chairman and Chief Executive Officer, holds a dual graduate degree in Naval Architecture and Marine Engineering and Ocean Systems Management from the Massachusetts Institute of Technology. He has worked in various technical, shipyard and ship management capacities and since 1991 has focused on the ownership and operation of vessels carrying dry cargoes. Dr. Anastasios Aslidis, our Chief Financial Officer, holds a Ph.D. in Ocean Systems Management also from Massachusetts Institute of Technology and has over 20 years of experience, primarily as a partner at a Boston based international consulting firm focusing on investment and risk management in the maritime industry. |
· | Cost Effective Vessel Operations . We believe that because of the efficiencies afforded to us through Eurobulk, the strength of our management team and the quality of our fleet, we are, and will continue to be, a reliable, low cost vessel operator, without compromising our high standards of performance, reliability and safety. Despite the average age of our fleet being approximately 18.5 years during 2014, our total vessel operating expenses, including management fees and general and administrative expenses but excluding drydocking expenses were $6,320 per day for the year ended December 31, 2014. We consider this amount to be among the lowest of the publicly listed drybulk or containerships shipping companies in the United States. Our technical and operating expertise allows us to efficiently manage and transport a wide range of cargoes with a flexible trade route profile, which helps reduce ballast time between voyages and minimize off-hire days. Our professional, well-trained masters, officers and on board crews further help us to control costs and ensure consistent vessel operating performance. We actively manage our fleet and strive to maximize utilization and minimize maintenance expenditures for operational and commercial utilization. For the year ended December 31, 2014, our operational fleet utilization was 99.7%, up from 98.9% in 2013, while our commercial utilization rate increased from 96.8% in 2013 to 98.0% in 2014. Our total fleet utilization rate in 2014 was 97.7%. |
· | Strong Relationships with Customers and Financial Institutions . We believe ourselves as well as Eurobulk and the Pittas family have developed strong industry relationships and have gained acceptance with charterers, lenders and insurers because of their long-standing reputation for safe and reliable service and financial responsibility through various shipping cycles. Through Eurobulk, we offer reliable service and cargo carrying flexibility that enables us to attract customers and obtain repeat business. We also believe that the established customer base and reputation of ourselves, Eurobulk and the Pittas family help us to secure favorable employment for our vessels with well-known charterers. |
· | Renew and Expand our Fleet . We expect to grow our fleet in a disciplined manner through timely and selective acquisitions of quality vessels. We perform in-depth technical review and financial analysis of each potential acquisition and only purchase vessels as market conditions and developments present themselves. We focus on purchasing well-maintained secondhand vessels, newbuildings or newbuilding resales based on the evaluation of each investment option at the time it is made. During 2014, we ordered or acquired the contracts of four drybulk carrier newbuildings and acquired one secondhand drybulk carrier. |
· | Maintain Balanced Employment . We intend to employ our fleet between longer term time charters, i.e. charters with duration of more than a year, and shorter term time or spot charters, if possible. We actively pursue longer term time charters to obtain adequate cash flow to cover as much as possible of our fleet's fixed costs, consisting of vessel operating expenses, management fees, general and administrative expenses, interest expense and drydocking costs for the upcoming 12-month period. We also may use forward freight agreements (to which we will refer as "FFA" or "FFAs") – as a substitute for time charter employment – to partly provide coverage for our drybulk vessels in order to increase the predictability of our revenues. We look to deploy the remainder of our fleet through spot charters, shipping pools or contracts of affreightment depending on our view of the direction of the markets and other tactical or strategic considerations. Our mix of short- and long-term charters is also based on our expectations about future market prospects; when we expect charter rates to improve we try to increase the percentage of our fleet employed in shorter term contracts (allowing us to take advantage of higher rates in the future), while when we expect the market to weaken we try to increase the percentage of our fleet employed in longer term contracts (allowing us to take advantage of higher current rates). We believe this balanced employment strategy will provide us with more predictable operating cash flows and sufficient downside protection, while allowing us to participate in the potential upside of the spot market during periods of rising charter rates. As of April 30, 2015, on the basis of our existing time charters, approximately 40% of our vessel capacity in the remainder of 2015 and approximately 6% in 2016 are fixed, which will help protect us from market fluctuations, enable us to make principal and interest payments on our debt and pay dividends to our shareholders. |
approximately 0% in 2016 are fixed, which will help protect us from market fluctuations, enable us to make principal and interest payments on our debt and pay dividends to our shareholders. |
· | Operate a Fleet in Two Sectors . While remaining focused on the dry cargo segment of the shipping industry, we intend to continue to develop a diversified fleet of drybulk carriers and containerships of up to Panamax size including Kamsarmax vessels. A diversified drybulk fleet profile will allow us to better serve our customers in both major and minor drybulk trades, as well as to reduce any dependency on any one cargo, trade route or customer. We will remain focused on the smaller size ship segment of the container market, which has not experienced the same level of expansion in vessel supply that has occurred with larger containerships. A diversified fleet, in addition to enhancing the stability of our cash flows, will also help us to reduce our exposure to unfavorable developments in any one shipping sector and to benefit from upswings in any one shipping sector experiencing rising charter rates. |
· | Optimize Use of Financial Leverage . We will use bank debt to partly fund our vessel acquisitions and increase financial returns for our shareholders. We actively assess the level of debt we incur in light of our ability to repay that debt based on the level of cash flow generated from our balanced chartering strategy and efficient operating cost structure. Our debt repayment schedule as of December 31, 2014 calls for a reduction of more than 36% of our debt by the end of 2015 and an additional reduction of more than 36% by the end of 2016 for a total of more than 72% reduction over the two years, excluding any new debt that we assumed or may assume. As our debt is being repaid we expect that our ability to raise or borrow additional funds more cheaply in order to grow our fleet and generate better returns for our shareholders will increase. |
(i) | injury to, destruction or loss of, or loss of use of, natural resources and related assessment costs; |
(ii) | injury to, or economic losses resulting from, the destruction of real and personal property; |
(iii) | net loss of taxes, royalties, rents, fees or net profit revenues resulting from injury, destruction or loss of real or personal property, or natural resources; |
(iv) | loss of subsistence use of natural resources that are injured, destroyed or lost; |
(v) | lost profits or impairment of earning capacity due to injury, destruction or loss of real or personal property or natural resources; and |
(vi) | net cost of increased or additional public services necessitated by removal activities following a discharge of oil, such as protection from fire, safety or health hazards, and loss of subsistence use of natural resources. |
|
·
|
on-board installation of automatic identification systems to provide a means for the automatic transmission of safety-related information from among similarly equipped ships and shore stations, including information on a ship's identity, position, course, speed and navigational status;
|
|
·
|
on-board installation of ship security alert systems, which do not sound on the vessel but only alert the authorities on shore;
|
|
·
|
the development of vessel security plans;
|
|
·
|
ship identification number to be permanently marked on a vessel's hull;
|
|
·
|
A continuous synopsis record kept onboard showing a vessel's history including the name of the ship, the state whose flag the ship is entitled to fly, the date on which the ship was registered with that state, the ship's identification number, the port at which the ship is registered and the name of the registered owner(s) and their registered address; and
|
|
·
|
compliance with flag state security certification requirements.
|
Vessel
|
Next
|
Type
|
||
NINOS
|
July 2015
|
Special Survey
|
||
MARINOS
|
March 2016
|
Drydocking
|
||
ARISTIDES N.P.
|
March 2016
|
Drydocking
|
||
KUO HSIUNG
|
July 2016
|
Drydocking
|
||
MANOLIS P
|
May 2015
|
Drydocking
|
||
CAPTAIN COSTAS
|
July 2017
|
Special Survey
|
||
DESPINA P
|
December 2015
|
Special Survey
|
||
TIGER BRIDGE
|
November 2015
|
Special Survey
|
||
EVRIDIKI
|
June 2016
|
Special Survey
|
||
MONICA P
|
April 2016
|
Drydocking
|
||
ELENI P
|
March 2017
|
Special Survey
|
||
PANTELIS
|
January 2018
|
Drydocking
|
||
JOANNA
|
June 2017
|
Drydocking
|
||
AGGELIKI P
|
October 2015
|
Drydocking
|
C. | Organizational structure |
D. |
Property, plants and equipment
|
Item 5. |
Operating and Financial Review and Prospects
|
A. |
Operating results
|
Vessel
|
Charter Rate as of
12/31/2014
|
Remaining
Months Chartered
|
Remaining
Life (years)
|
Rate Year
1 (2015)
|
Rate Year
2 (2016)
|
Rate Year
3+ (2017+)
|
Breakeven Rate
(USD/day)
|
Ninos
|
8,400
|
5
|
0.5
|
6.540
|
6.540
|
9,321
|
442
|
Kuo Hsiung
|
8,700
|
6.5
|
3.5
|
6540
|
6,540
|
9,321
|
6,376
|
Aristides NP(*)
|
4,250
|
1
|
3.5
|
8,659
|
8,659
|
18,046
|
10,096
|
Manolis P
|
7,200
|
3.5
|
5.5
|
6,626
|
6,626
|
11,236
|
8,096
|
Cpt. Costas
|
7,750
|
8
|
2.5
|
7,083
|
7,083
|
12,010
|
7,525
|
Despina P
|
6,950
|
3
|
0.5
|
7,452
|
7,452
|
12,716
|
2,135
|
Tiger Bridge
|
7,000
|
3.5
|
0.5
|
7,735
|
7,735
|
13,911
|
1,783
|
Pantelis
|
9,319
|
3
|
10.5
|
10,014
|
10,014
|
21,496
|
12,936
|
Aggeliki
|
6,900
|
4.5
|
8.5
|
7,454
|
7,454
|
12,720
|
10,083
|
Eleni P
|
8,609
|
12.5
|
7.5
|
9,749
|
9,749
|
20,318
|
12,359
|
Monica P
|
5,500
|
2.5
|
8.5
|
9,035
|
9,035
|
18,203
|
11,286
|
Evridiki
|
8,200
|
4
|
11.5
|
9,022
|
9,022
|
16,990
|
10,786
|
Eirini P
|
7,733
|
11
|
14.5
|
10,493
|
10,493
|
22,571
|
8,827
|
Joanna
|
7,250
|
4
|
9.5
|
7,680
|
7,680
|
12,010
|
10,353
|
Marinos
|
6,500
|
1
|
3.5
|
6,462
|
6,462
|
10,958
|
7,675
|
B. | Liquidity and Capital Resources |
C. | Research and development, patents and licenses, etc. |
D. | Trend information |
E. | Off-balance Sheet Arrangements |
F. | Tabular Disclosure of Contractual Obligations |
|
|
|
||||||||||||||||||
In U.S. dollars
|
Total
|
Less Than
One Year
|
One to
Three Years |
Three to
Five Years
|
More Than
Five Years
|
|||||||||||||||
Bank debt
|
$
|
54,257,000
|
$
|
19,512,000
|
$
|
24,345,000
|
$
|
10,400,000
|
—
|
|||||||||||
Interest Payments (1)
|
$
|
5,982,903
|
$
|
2,369,080
|
$
|
2,216,490
|
$
|
1,062,920
|
$
|
334,413
|
||||||||||
Vessel Management fees (2, 5)
|
$
|
30,223,409
|
$
|
5,323,032
|
$
|
12,003,280
|
$
|
12,897,097
|
—
|
|||||||||||
Other Management fees
(3)
|
$
|
10,724,932
|
$
|
2,000,000
|
$
|
4,212,450
|
$
|
4,512,482
|
—
|
|||||||||||
Shipyard payments
|
$
|
95,553,000
|
$
|
51,590,000
|
$
|
43,963,000
|
—
|
—
|
||||||||||||
Total
|
$
|
196,741,244
|
$
|
80,794,112
|
$
|
86,740,220
|
$
|
28,872,499
|
$
|
334,313
|
G. | Safe Harbor |
Item 6. | Directors, Senior Management and Employees |
A. | Directors and Senior Management |
Name
|
Age
|
Position
|
Aristides J. Pittas
|
55
|
Chairman, President and CEO; Class A Director
|
Dr. Anastasios Aslidis
|
55
|
CFO and Treasurer; Class A Director
|
Aristides P. Pittas
|
63
|
Vice Chairman; Class A Director
|
Stephania Karmiri
|
47
|
Secretary
|
Panagiotis Kyriakopoulos
|
54
|
Class B Director
|
George Skarvelis
|
54
|
Class B Director
|
George Taniskidis
|
54
|
Class C Director
|
Apostolos Tamvakakis
|
63
|
Class C Director (since June 25, 2013)
|
Tim Gravely
|
37
|
Series B Director (since January 31, 2014)
|
B. | Compensation |
C. | Board Practices |
· | We are not required under Marshall Islands law to maintain a Board of Directors with a majority of independent directors, and we may not be able to maintain a Board of Directors with a majority of independent directors in the future. |
· | In lieu of a compensation committee comprised of independent directors, our Board of Directors will be responsible for establishing the executive officers' compensation and benefits. Under Marshall Islands law, compensation of the executive officers is not required to be determined by an independent committee. |
· | In lieu of a nomination committee comprised of independent directors, our Board of Directors will be responsible for identifying and recommending potential candidates to become board members and recommending directors for appointment to board committees. Shareholders may also identify and recommend potential candidates to become candidates to become board members in writing. No formal written charter has been prepared or adopted because this process is outlined in our bylaws. |
· | In lieu of obtaining an independent review of related party transactions for conflicts of interests, consistent with Marshall Islands law requirements, a related party transaction will be permitted if: (i) the material facts as to his or her relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors and the Board of Directors in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, or, if the votes of the disinterested directors are insufficient to constitute an act of the Board of Directors as defined in Section 55 of the Marshall Islands Business Corporations Act, by unanimous vote of the disinterested directors; or (ii) the material facts as to his relationship or interest are disclosed and the shareholders are entitled to vote thereon, and the contract or transaction is specifically approved in good faith by a simple majority vote of the shareholders; or (iii) the contract or transaction is fair as to the Company as of the time it is authorized, approved or ratified, by the Board of Directors, a committee thereof or the shareholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction. |
· | As a foreign private issuer, we are not required to solicit proxies or provide proxy statements to Nasdaq pursuant to Nasdaq corporate governance rules or Marshall Islands law. Consistent with Marshall Islands law, we will notify our shareholders of meetings between 15 and 60 days before the meeting. This notification will contain, among other things, information regarding business to be transacted at the |
meeting. In addition, our bylaws provide that shareholders must give us advance notice to properly introduce any business at a meeting of the shareholders. Our bylaws also provide that shareholders may designate in writing a proxy to act on their behalf. |
· | In lieu of holding regular meetings at which only independent directors are present, our entire Board of Directors, a majority of whom are independent, will hold regular meetings as is consistent with the laws of the Republic of the Marshall Islands. |
· | The Board of Directors adopted a new Equity Incentive Plan in July 2014. Shareholder approval was not necessary since Marshall Islands law permits the Board of Directors to take such actions. |
· | As a foreign private issuer, we are not required to obtain shareholder approval if any of our directors, officers or 5% or greater shareholders has a 5% or greater interest (or such persons collectively have a 10% or greater interest), directly or indirectly, in the company or assets to be acquired or in the consideration to be paid in the transaction(s) and the present or potential issuance of common stock, or securities convertible into or exercisable for common stock, could result in an increase in outstanding common stock or voting power of 5% or more. |
· | In lieu of obtaining shareholder approval prior to the issuance of designated securities, the Company will comply with provisions of the Marshall Islands Business Corporations Act, providing that the Board of Directors approves share issuances. |
D. | Employees |
E. | Share Ownership |
Item 7. |
Major Shareholders and Related Party Transactions
|
A. | Major Stockholders |
Name of Beneficial Owner(1)
|
Number of
Shares of Voting Common Stock Beneficially Owned |
Percent of
Voting of common Stock (15) |
Number of
Shares of Voting Series B Preferred Stock Beneficially Owned |
Percent of
Voting of Series B Stock (16) |
Number of
Shares of Voting Common Stock Beneficially Owned Upon Conversion; 50% Voting Before Conversion |
Percent of
Total Voting Securities |
||||||||||||||||||
Friends Investment Company Inc.(2)
|
16,175,361
|
28.0
|
%
|
-
|
-
|
23.4
|
%
|
|||||||||||||||||
Tennenbaum Opportunities Fund VI, LLC (3, 4)
|
-
|
-
|
26,500
|
81.4
|
%
|
18,275,862
|
13.2
|
%
|
||||||||||||||||
12 West Capital Fund L.P. (5) (**)
|
7,592,110
|
13.1
|
%
|
-
|
-
|
-
|
11.0
|
%
|
||||||||||||||||
Fred H Brenner (***)
|
4,330,014
|
7.5
|
%
|
-
|
-
|
-
|
6.3
|
%
|
||||||||||||||||
12 West Capital Offshore Fund L.P. (5)
(**)
|
3,572,758
|
6.2
|
%
|
-
|
-
|
-
|
5.2
|
%
|
||||||||||||||||
Family United Navigation Co.
|
2,923,658
|
5.1
|
%
|
-
|
-
|
-
|
4.2
|
%
|
||||||||||||||||
Preferred Friends Investment Company Inc.(4)
|
-
|
-
|
6,042
|
18.6
|
%
|
4,166,897
|
3.0
|
%
|
||||||||||||||||
Aristides J. Pittas(6)
|
686,076
|
1.2
|
%
|
-
|
-
|
-
|
1.0
|
%
|
||||||||||||||||
George Skarvelis(7)
|
43,540
|
*
|
-
|
-
|
-
|
*
|
||||||||||||||||||
George Taniskidis(8)
|
99,040
|
*
|
-
|
-
|
-
|
*
|
||||||||||||||||||
Panagiotis Kyriakopoulos(9)
|
233,480
|
*
|
-
|
-
|
-
|
*
|
||||||||||||||||||
Aristides P. Pittas(10)
|
81,000
|
*
|
-
|
-
|
-
|
*
|
||||||||||||||||||
Anastasios Aslidis(11)
|
475,000
|
*
|
-
|
-
|
-
|
*
|
||||||||||||||||||
Apostolos Tamvakakis(12)
|
21,000
|
*
|
-
|
-
|
-
|
*
|
||||||||||||||||||
Timothy Gravely
|
-
|
*
|
-
|
-
|
-
|
*
|
||||||||||||||||||
Stephania Karmiri(13)
|
-
|
*
|
-
|
-
|
-
|
*
|
||||||||||||||||||
Symeon Pariaros(14)
|
41,500
|
*
|
-
|
-
|
-
|
*
|
||||||||||||||||||
All directors and officers and 5% owners as a group
|
36,274,537
|
62.7
|
%
|
32,542
|
100
|
%
|
22,442,759
|
68.7
|
%
|
(1) | Beneficial ownership is determined in accordance with the Rule 13d-3(a) of the Securities Exchange Act of 1934, as amended, and generally includes voting or investment power with respect to securities. Except as subject to community property laws, where applicable, the person named above has sole voting and investment power with respect to all shares of common stock shown as beneficially owned by him/her. |
(2) | Represents 16,175,361 shares of common stock held of record by Friends. A majority of the shareholders of Friends are members of the Pittas family. Investment power and voting control by Friends resides in its Board of Directors which consists of five directors, a majority of whom are members of the Pittas family. Actions by Friends may be taken by a majority of the members on its Board of Directors. |
(3) | Tennenbaum Capital Partners, LLC serves as investment advisor to, inter alia, Tennenbaum Opportunities Fund VI, LLC, and has sole voting and investment power with respect to all securities owned of record by Tennenbaum Opportunities Fund VI, LLC. The address for each of Tennenbaum Capital Partners, LLC and Tennenbaum Opportunities Fund VI, LLC is 2951 28th Street, Suite 1000, Santa Monica, CA 90405. |
(4) | Common shares are issuable upon conversion of Series B Preferred Shares (or any convertible notes into which the Series B Preferred Shares may convert) owned by this shareholder (based on the current conversion ratio). |
(5) | 12 West Capital Management LP ("12 West Management") serves as the investment manager to 12 West Capital Fund LP, a Delaware limited partnership ("12 West Onshore Fund"), and 12 West Capital Offshore Fund LP, a Cayman Islands exempted limited partnership ("12 West Offshore Fund"), and possesses the sole power to vote and the sole power to direct the disposition of all securities of the Company held by 12 West Onshore Fund and 12 West Offshore Fund. Joel Ramin, as the sole member of 12 West Capital Management, LLC, the general partner of 12 West Management, possesses the voting and dispositive power with respect to the securities beneficially owned by 12 West Management. The address for each of 12 West Capital Fund LP and 12 West Capital Offshore Fund LP is c/o 12 West Capital Management LP, 90 Park Avenue, 41st Floor, New York, NY 10016. |
(6) | Does not include 734,168 shares of common stock held of record by Friends, by virtue of ownership interest in Friends by Mr. Pittas. Mr. Pittas disclaims beneficial ownership except to the extent of his pecuniary interest. Does not include 1,613 shares of Series B Preferred stock held of record by Preferred Friends Investment Company Inc., by virtue of ownership interest in Preferred Friends Investment Company Inc. by Mr. Pittas. Mr. Pittas disclaims beneficial ownership except to the extent of his pecuniary interest. Includes 49,500 shares vesting on July 1, 2016, 49,500 shares vesting on November 16, 2016 and 49,500 shares vesting on July 1, 2016. |
(7) | Does not include 890,468 shares of common stock held of record by Friends, by virtue of Mr. Skarvelis' ownership interest in Friends. Mr. Skarvelis disclaims beneficial ownership except to the extent of his pecuniary interest. Includes 5,250 shares vesting on July 1, 2015, 5,250 shares vesting on November 16, 2015 and 5,250 shares vesting on July 1, 2016. |
(8) | Does not include 77,390 shares of common stock held of record by Friends, by virtue of Mr. Taniskidis' ownership in Friends. Mr. Taniskidis disclaims beneficial ownership except to the extent of his pecuniary interest. Does not include 856 shares of Series B Preferred stock held of record by Preferred Friends Investment Company Inc., by virtue of ownership interest in Preferred Friends Investment Company Inc.by Mr. Taniskidis and members of his family. Mr. Taniskidis disclaims beneficial ownership except to the extent of his pecuniary interest. Includes 5,250 shares vesting on July 1, 2015, 5,250 shares vesting on November 16, 2015 and 5,250 shares vesting on July 1, 2016. |
(9) | Includes 5,250 shares vesting on July 1, 2015, 5,250 shares vesting on November 16, 2015 and 5,250 shares vesting on July 1, 2016. |
(10) | Does not include 1,511,829 shares of common stock held of record by Friends and Family United Navigation Co., by virtue of ownership interest in Friends of Mr. Pittas and members of his family. Mr. Pittas disclaims beneficial ownership except to the extent of his pecuniary interest. Does not include 828 shares of Series B Preferred stock held of record by Preferred Friends Investment Company Inc., by virtue of ownership interest in Preferred Friends Investment Company Inc.by Mr. Pittas and members of his family. Mr. Pittas disclaims beneficial ownership except to the extent of his pecuniary interest. Includes 13,500 shares vesting on July 1, 2015, 13,500 shares vesting on November 16, 2015 and 13,500 shares vesting on July 1, 2016. |
(11) | Includes 33,750 shares vesting on July 1, 2015, 33,750 shares vesting on November 16, 2015 and 33,750 shares vesting on July 1, 2016. |
(12) | Includes 5,250 shares vesting on July 1, 2015 and 5,250 shares vesting on July 1, 2016. |
(13) | Does not include 3,471 shares of common stock held of records by Friends, by virtue of Mrs. Karmiri's ownership in Friends. Mrs. Karmiri disclaims beneficial ownership except to the extent of her pecuniary interest. |
(14) | Includes 5,250 shares vesting on July 1, 2015, 5,250 shares vesting on November 16, 2015 and 5,250 shares vesting on July 1, 2016. |
(15) | Voting stock includes 675,000 unvested shares in addition to the 57,157,313 issued and outstanding shares of the Company as of April 25, 2015. |
(16) | Series B Preferred stock votes on an as-converted basis weighted by 50%. |
B. | Related Party Transactions |
C. | Interests of Experts and Counsel |
Item 8. | Financial Information |
A. | Consolidated Statements and Other Financial Information |
B. | Significant Changes |
Item 9. | The Offer and Listing |
A. | Offer and Listing Details |
Period
|
Low
|
High
|
|||
Year Ended Dec. 31, 2010
|
3.31
|
4.50
|
|||
Year Ended Dec. 31, 2011
|
2.26
|
4.85
|
|||
Year Ended Dec. 31, 2012
|
0.86
|
3.05
|
|||
Year Ended Dec. 31, 2013
|
0.93
|
1.79
|
|||
1
st
quarter 2013
|
0.93
|
1.16
|
|||
2
nd
quarter 2013
|
1.00
|
1.24
|
|||
3
rd
quarter 2013
|
1.02
|
1.79
|
|||
4
th
quarter 2013
|
1.13
|
1.54
|
|||
Year Ended Dec. 31, 2014
|
0.77
|
1.42
|
|||
1
st
quarter 2014
|
1.25
|
1.42
|
|||
2
nd
quarter 2014
|
1.12
|
1.31
|
|||
3
rd
quarter 2014
|
1.10
|
1.19
|
|||
4
th
quarter 2014
|
0.75
|
1.10
|
|||
October 2014
|
0.99
|
1.10
|
|||
November 2014
|
0.91
|
1.08
|
|||
December 2014
|
0.75
|
0.88
|
|||
January 2015
|
0.71
|
0.78
|
|||
February 2015
|
0.71
|
0.77
|
|||
March 2015
|
0.71
|
0.81
|
|||
April 2015 (through April 29)
|
0.71
|
0.84
|
B. | Plan of Distribution |
C. | Markets |
D. | Selling Shareholders |
E. | Dilution |
F. | Expenses of the Issue |
Item 10. | Additional Information |
A. | Share Capital |
B. | Memorandum and Articles of Association |
C. | Material Contracts |
D. | Exchange Controls |
E. | Taxation |
· | we are organized in a foreign country, or our country of organization, that grants an "equivalent exemption" to corporations organized in the United States; and |
· | more than 50% of the value of our stock is owned, directly or indirectly, by "qualified shareholders," individuals who are "residents" of our country of organization or of another foreign country that grants an "equivalent exemption" to corporations organized in the United States, which we refer to as the "50% Ownership Test," or |
· | our stock is "primarily and regularly traded on an established securities market" in our country of organization, in another country that grants an "equivalent exemption" to United States corporations, or in the United States, which we refer to as the "Publicly-Traded Test." |
· | We have, or are considered to have, a fixed place of business in the United States involved in the earning of shipping income; and |
· | substantially all of our U.S.-source shipping income is attributable to regularly scheduled transportation, such as the operation of a vessel that follows a published schedule with repeated sailings at regular intervals between the same points for voyages that begin or end in the United States. |
· | at least 75% of our gross income for such taxable year consists of passive income (e.g., dividends, interest, capital gains and rents derived other than in the active conduct of a rental business); or |
· | at least 50% of the average value of our assets during such taxable year produce, or are held for the production of, passive income, which we refer to as "passive assets". |
· | such gain is effectively connected with the Non-U.S. Holder's conduct of a trade or business in the United States, if the Non-U.S. Holder is entitled to the benefits of a United States income tax treaty with respect to that gain, that gain is taxable only if it is attributable to a permanent establishment maintained by the Non-U.S. Holder in the United States; or |
· | the Non-U.S. Holder is an individual who is present in the United States for 183 days or more during the taxable year of disposition and other conditions are met. |
· | fails to provide an accurate taxpayer identification number; |
· | is notified by the IRS that he failed to report all interest or dividends required to be shown on your United States federal income tax returns; or |
· | in certain circumstances, fails to comply with applicable certification requirements. |
F. | Dividends and paying agents |
G. | Statement by experts |
H. | Documents on display |
I. | Subsidiary Information |
Item 11. | Quantitative and Qualitative Disclosures about Market Risk |
Year Ended December 31,
|
Amount in $ (loans)
|
Amount in $ (swap)
|
||||||
2015
|
437,420
|
(209,041
|
)
|
|||||
2016
|
255,475
|
(205,479
|
)
|
|||||
2017
|
127,150
|
(100,000
|
)
|
|||||
2018
|
95,250
|
(100,000
|
)
|
|||||
2019 and thereafter
|
21,625
|
(59,452
|
)
|
|||||
Year Ended December 31,
|
Amount in $ (revenues)
|
|||
2015
|
3,997,000
|
|||
2016
|
5,250,000
|
|||
2017 and thereafter
|
5,250,000
|
|||
Item 12. | Description of Securities Other than Equity Securities |
Item 13. | Defaults, Dividend Arrearages and Delinquencies |
Item 14. | Material Modifications to the Rights of Security Holders and Use of Proceeds |
Item 15. | Controls and Procedures |
Item 16A. | Audit Committee Financial Expert |
Item 16B. | Code of Ethics |
2013
(dollars in thousands) |
2014
(dollars in thousands) |
|||||||
Audit Fees
|
$
|
373
|
$
|
340
|
|
|||
Audit related fees
|
—
|
—
|
||||||
Tax fees
|
—
|
—
|
||||||
All other fees / expenses
|
—
|
—
|
||||||
Total
|
$
|
373
|
$
|
340
|
|
Item 17. | Financial Statements |
Item 18. | Financial Statements |
Item 19. | Exhibits |
1.1
|
Amended and Restated Articles of Incorporation of Euroseas Ltd.(12)
|
|
1.2
|
Bylaws of Euroseas Ltd.(11)
|
|
1.3
|
Amendment to Bylaws of Euroseas Ltd.(11)
|
|
2.1
|
Specimen Common Stock Certificate(7)
|
|
2.2
|
Form of Securities Purchase Agreement(1)
|
|
2.3
|
Form of Registration Rights Agreement(1)
|
|
2.4
|
Form of Warrant(1)
|
|
2.5
|
Registration Rights Agreement between Euroseas Ltd. and Friends Investment Company Inc., dated November 2, 2005(2)
|
|
2.6
|
Registration Rights Agreement among Euroseas Ltd., Paros Ltd., All Seas Investors I Ltd., All Seas Investors II Ltd. and All Seas Investors III LP dated March 25, 2010(11)
|
|
2.7
|
Form of Subscription Rights Certificate(13)
|
|
3.1
|
Shareholder Voting Agreement among Euroseas Ltd., Paros Ltd., All Seas Investors I Ltd., All Seas Investors II Ltd., All Seas Investors III LP, Friends Investment Company Inc. and Aristides J. Pittas dated March 25, 2010(11)
|
|
4.1
|
Form of Lock-up Agreement(1)
|
|
4.2
|
Form of Standard Ship Management Agreement(1)
|
|
4.3
|
Agreement between Eurobulk Ltd. and Eurochart S.A., for the provision of exclusive brokerage services, dated December 20, 2004(1)
|
|
4.4
|
Form of Current Time Charter(1)
|
|
4.5
|
Amended and Restated Master Management Agreement between Euroseas Ltd. and Eurobulk Ltd. dated as of July 17, 2007, as amended February 7, 2008 (6)
|
|
4.6
|
Addendum No. 1 to Amended and Restated Master Management Agreement between Euroseas Ltd. and Eurobulk Ltd. dated as of February 7, 2009 (9)
|
|
4.7
|
Loan Agreement between Xenia International Corp., as borrower, and Fortis Bank N.V./S.A., Athens Branch and others, as lenders, for the amount of US$8,250,000 dated June 30, 2006(3)
|
|
4.8
|
Loan Agreement between Prospero Maritime Inc., as borrower, and Calyon, as lender, for the amount of US$15,500,000 dated August 30, 2006(3)
|
|
4.9
|
Euroseas 2007 Equity Incentive Plan(8)
|
|
4.10
|
Loan Agreement among Xingang Shipping Ltd., as borrower, and HSBC Bank plc, as lender, and Diana Trading Ltd. and Euroseas Ltd., as corporate guarantors,for the amount of US$20,000,000 dated November 14, 2006(4)
|
|
4.11
|
Amendment to Loan Agreement among Xingang Shipping Ltd, as borrower, HSBC Bank plc, as lender, and Diana Trading Ltd. and Euroseas Ltd., as corporate guarantors, dated April 14, 2010(11)
|
|
4.12
|
Form of Right of First Refusal(5)
|
|
4.13
|
Form of Advisory Agreement(5)
|
|
4.14
|
Loan Agreement between Manolis Shipping Limited, as borrower, and EFG Eurobank Ergasias S.A., as lender, for the amount of US$10,000,000 dated June 7, 2007(6)
|
|
4.15
|
Supplemental Agreement to Loan Agreement between Manolis Shipping Limited, as borrower, and EFG Eurobank Ergasias S.A., as lender, dated August 5, 2009(11)
|
|
4.16
|
Loan Agreement between Trust Navigation Corp., as borrower, and EFG Eurobank Ergasias S.A., as lender, for the amount of US$15,000,000 dated October 29, 2007 (6)
|
4.17
|
Amendment to Loan Agreement between Trust Navigation Corp., as borrower and EFG Eurobank Ergasias S.A., as lender, dated December 30, 2008(9)
|
|
4.18
|
Amendment to Loan Agreement between Trust Navigation Corp., as borrower, and EFG Eurobank Ergasias S.A., as lender, dated October 26, 2010(12)
|
|
4.19
|
Form of Senior Security Debt Indenture(7)
|
|
4.20
|
Form of Subordinated Debt Security Indenture(7)
|
|
4.21
|
Loan Agreement between Saf-Concord Shipping Ltd., as borrower, and EFG Eurobank Ergasias S.A., as lender, for the amount of US$10,000,000 dated January 9, 2009(9)
|
|
4.22
|
Loan Agreement between Eleni Shipping Ltd., as borrower, and Calyon, as lender, for the amount of US$10,000,000 dated April 30, 2009(9)
|
|
4.23
|
Shareholders Rights Agreement between Euroseas Ltd. and American Stock Transfer and Trust Company, LLC dated May 18, 2009(10)
|
|
4.24
|
Amendment to Shareholders Rights Agreement between Euroseas Ltd. and American Stock Transfer and Trust Company, LLC dated March 25, 2010(11)
|
|
4.25
|
Loan Agreement between Pantelis Shipping Corp., as borrower, and HSBC Bank plc, as lender, for the amount of US$13,000,000 dated December 14, 2009(11)
|
|
4.26
|
Amendment to Loan Agreement between Pantelis Shipping Corp., as borrower, and HSBC Bank plc, as lender, dated April 14, 2010 (11)
|
|
4.27
|
Limited Liability Company Agreement for Euromar LLC, among Euroseas Ltd., Paros Ltd., All Seas Investors I Ltd., All Seas Investors II Ltd. and All Seas Investors III LP dated March 25, 2010(11)
|
|
4.28 |
First Amendment to Limited Liability Company Agreement for Euromar LLC, among Euroseas Ltd., Paros Ltd., All Seas Investors I Ltd., All Seas Investors II Ltd. and All Seas Investors III LP dated April 26, 2012 (14)
|
|
4.29
|
Management Agreement among Euromar LLC, the vessel owning subsidiaries of Euromar LLC, Euroseas Ltd., Eurobulk Ltd. and Eurochart S.A. dated March 25, 2010(11)
|
|
4.30
|
Agreement Regarding Vessel Opportunities among Euroseas Ltd., Eurobulk Ltd., Eurochart S.A., Aristides J. Pittas and Euromar LLC dated March 25, 2010(11)
|
|
4.31
|
First Amendment to Agreement Regarding Vessel Opportunities among Euroseas Ltd., Eurobulk Ltd., Eurochart S.A., Aristides J. Pittas and Euromar LLC dated April 26, 2012 (14)
|
|
4.32
|
Euroseas 2010 Equity Incentive Plan(11)
|
|
4.33
|
Loan Agreement between Noumea Shipping Ltd, as borrower, and Crédit Agricole Corporate and Investment Bank, as lender, for the amount of US$20,000,000 dated December 28, 2010(12)
|
|
4.34
|
Loan Agreement between Aggeliki Shipping Ltd, as borrower, and DVB Bank SE, as lender, for the amount of US$8,500,000 dated November 5, 2010(12)
|
|
4.35
|
Amendment to Loan Agreement between SAF Concord Shipping Ltd., as borrower, and EFG Eurobank Ergasias S.A., as lender, dated October 29, 2012 (previously filed as Exhibit 4.35 to Euroseas Ltd. Registration Statement on Form 20-F (File No.
001-33283
) on April 30, 2013 and incorporated by reference herein)
|
|
4.36
|
Amendment to Loan Agreement between Tiger Navigation Corp., as borrower, and EFG Eurobank Ergasias S.A., as lender, dated October 29, 2012 (previously filed as Exhibit 4.35 to Euroseas Ltd. Registration Statement on Form 20-F (File No.
001-33283
) on April 30, 2013 and incorporated by reference herein)
|
|
4.37
|
Amendment to Loan Agreement between Manolis Shipping Ltd., SAF Concord Shipping Ltd, Tiger Navigation Corp. and Alterwall Business Inc., as borrowers, and EFG Eurobank Ergasias S.A., as lender, dated October 29, 2012 (previously filed as Exhibit 4.35 to Euroseas Ltd. Registration Statement on Form 20-F (File No.
001-33283
) on April 30, 2013 and incorporated by reference herein)
|
|
4.38
|
Amendment to Loan Agreement between Xingang Shipping Ltd. and Diana Shipping Ltd., as borrowers, and HSBC Bank plc, as lender, dated April 5, 2013 (previously filed as Exhibit 4.35 to Euroseas Ltd. Registration Statement on Form 20-F (File No.
001-33283
) on April 30, 2013 and incorporated by reference herein)
|
|
4.39
|
Second Amendment to Limited Liability Company Agreement for Euromar LLC, among Euroseas Ltd., Paros Ltd., All Seas Investors I Ltd., All Seas Investors II Ltd. and All Seas Investors III LP dated March 18, 2013 (previously filed as Exhibit 4.35 to Euroseas Ltd. Registration Statement on Form 20-F (File No.
001-33283
) on April 30, 2013 and incorporated by reference herein)
|
4.40
|
Securities Purchase Agreement dated as of March 10, 2014 among Euroseas Ltd., 12 West Capital Fund LP and 12 West Capital Offshore Fund LP (previously filed as Exhibit 99.2 on Form 6-K (File No.
001-33283
) on March 18, 2014 and incorporated by reference herein).
|
|
4.41
|
Registration Rights Agreement dated March 14, 2014 among Euroseas Ltd., 12 West Capital Fund LP and 12 West Capital Offshore Fund LP (previously filed as Exhibit 99.3 on Form 6-K (File No.
001-33283
) on March 18, 2014 and incorporated by reference herein)
|
|
4.42
|
Amendment to Registration Rights Agreement, dated as of March 14, 2014 to the Registration Rights Agreement, dated as of January 26, 2014, as amended by and among Euroseas Ltd., Tennenbaum Opportunities Fund VI, LLC, and Friends Investment Company, Inc. (previously filed as Exhibit 99.4 on Form 6-K (File No.
001-33283
) on March 18, 2014 and incorporated by reference herein)
|
|
4.43
|
Third Amendment to Shareholders Rights Agreement dated as of March 14, 2014 between Euroseas Ltd. and American Stock Transfer and Trust Company, LLC. (previously filed as Exhibit 99.5 on Form 6-K (File No.
001-33283
) on March 18, 2014 and incorporated by reference herein)
|
|
4.44
|
Statement of Designation of the Rights, Preferences and Privileges of Series B Convertible Perpetual Preferred Shares of Euroseas Ltd. (previously filed as Exhibit 99.2 on Form 6-K (File No.
001-33283
) on January 29, 2014 and incorporated by reference herein)
|
|
4.45
|
Specimen Certificate for the Series B Preferred Shares (previously filed as Exhibit 99.3 on Form 6-K (File No.
001-33283
) on January 29, 2014 and incorporated by reference herein)
|
|
4.46
|
Form of Securities Purchase Agreement in connection with the sale of the Series B Preferred Shares (previously filed as Exhibit 99.4 on Form 6-K (File No.
001-33283
) on January 29, 2014 and incorporated by reference herein).
|
|
4.47
|
Form of Registration Rights Agreement in connection with the sale of the Series B Preferred Shares (previously filed as Exhibit 99.5 on Form 6-K (File No.
001-33283
) on January 29, 2014 and incorporated by reference herein)
|
|
4.48
|
Form of Second Amendment to Shareholders Rights Agreement dated January 27, 2014 between Euroseas Ltd. and American Stock Transfer and Trust Company LLC (previously filed as Exhibit 99.6 on Form 6-K (File No.
001-33283
) on January 29, 2014 and incorporated by reference herein).
|
|
4.49
|
Addendum No. 6 to Amended and Restated Master Management Agreement between Euroseas Ltd. and Eurobulk Ltd. dated as of February 4, 2014
|
|
4.50
|
Euroseas 2014 Equity Incentive Plan
|
|
4.51
|
Financial Agreement between Ultra Two Shipping Ltd, as borrower, and HSBC Bank Plc, as lender, relating to a term loan facility of up to US$19,950,000 dated January 12, 2015
|
|
4.52
|
Loan Agreement between Ultra Two Shipping Ltd, as borrower, and HSH Nordbank AG, as lead arranger, for a term loan facility of up to US$19,000,000 dated March 20, 2015
|
|
8.1
|
Subsidiaries of the Registrant
|
|
12.1
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
|
|
12.2
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
|
|
13.1
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
13.2
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
15.1
|
Consent of Deloitte, Hadjipavlou, Sofianos & Cambanis S.A.
|
|
101.INS*
|
XBRL Instance Document
|
|
101.SCH*
|
XBRL Taxonomy Extension Schema Document
|
|
101.CAL*
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
101.DEF*
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
101.LAB*
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
101.PRE*
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
* | Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for the purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections. |
(1)
(2)
|
Filed as an Exhibit to the Company's Registration Statement (File No. 333-129145) on October 20, 2005.
Filed as an Exhibit to the Company's Amendment No.1 to Registration Statement (File No. 333-129145) on December 5, 2005.
|
(3) | Filed as an Exhibit to the Company's Post-Effective Amendment No. 1 to Registration Statement (File No. 333-12945) on September 12, 2006. |
(4) | Filed as an Exhibit to the Company's Registration Statement (File No. 333-138780) on November 17, 2006. |
(5) | Filed as an Exhibit to the Company's Amendment No. 4 to Registration Statement (File No. 333-138780) on January 29, 2007. |
(6) | Filed as an Exhibit to the Company's Annual Report on Form 20-F (File No. 001-33283) on May 13, 2008. |
(7) | Filed as an Exhibit to the Company's Registration Statement (File No. 333-152089) on July 2, 2008. |
(8) | Filed as an Exhibit to the Company's Post-Effective Amendment No. 1 to Registration Statement (File No. 333-148124) on July 17, 2008. |
(9) | Filed as an Exhibit to the Company's Annual Report on Form 20-F (File No. 001-33283) on May 18, 2009. |
(10) | Filed as an Exhibit to the Company's Form 6-K (File No. 001-33283) on May 18, 2009. |
(11) | Filed as an Exhibit to the Company's Annual Report on Form 20-F (File No. 001-33283) on May 28, 2010. |
(12) | Filed as an Exhibit to the Company's Annual Report on Form 20-F (File No. 001-33283) on May 27, 2011. |
(13) | Filed as an Exhibit to the Company's Form 6-K (File No. 001-33283) on May 25, 2012. |
(14) | Filed as an Exhibit to the Company's Annual Report on Form 20-F (File No. 001-33283) on April 27, 2012. |
EUROSEAS LTD.
|
||
(Registrant)
|
||
By:
|
/s/ Aristides J. Pittas
|
|
Aristides J. Pittas
|
||
Chairman, President and CEO
|
||
Date
: April 30, 2015
|
Pages
|
|
Report of Independent Registered Public Accounting Firm
|
F-2
|
Consolidated Balance Sheets as of December 31, 2013 and 2014
|
F-3
|
Consolidated Statements of Operations for the Years Ended
|
|
December 31, 2012, 2013 and 2014
|
F-5
|
Consolidated Statements of Shareholders' Equity for the Years Ended
|
|
December 31, 2012, 2013 and 2014
|
F-6
|
Consolidated Statements of Cash Flows for the Years Ended
|
|
December 31, 2012, 2013 and 2014
|
F-7
|
Notes to the Consolidated Financial Statements
|
F-9
|
Notes
|
2013
|
2014
|
||||||||||
Assets
|
||||||||||||
Current assets
|
||||||||||||
Cash and cash equivalents
|
11,400,237
|
25,411,420
|
||||||||||
Trade accounts receivable, net
|
1,879,151
|
2,189,986
|
||||||||||
Other receivables
|
1,440,833
|
844,720
|
||||||||||
Inventories
|
3
|
1,474,114
|
1,758,930
|
|||||||||
Restricted cash
|
9
|
462,415
|
294,093
|
|||||||||
Prepaid expenses
|
295,248
|
348,231
|
||||||||||
Total current assets
|
16,951,998
|
30,847,380
|
||||||||||
Fixed assets
|
||||||||||||
Vessels, net
|
5
|
105,463,737
|
111,150,227
|
|||||||||
Advances for vessels under construction
|
4
|
50,122
|
15,687,490
|
|||||||||
Long-term assets
|
||||||||||||
Restricted cash
|
9
|
7,400,000
|
7,700,000
|
|||||||||
Deferred charges, net
|
6
|
338,431
|
335,621
|
|||||||||
Other investments
|
17
|
5,196,196
|
6,183,800
|
|||||||||
Investment in joint venture
|
17
|
21,215,870
|
18,674,094
|
|||||||||
Total long-term assets
|
139,664,356
|
159,731,232
|
||||||||||
Total assets
|
156,616,354
|
190,578,612
|
||||||||||
Liabilities and shareholders' equity
|
||||||||||||
Current liabilities
|
||||||||||||
Long-term debt, current portion
|
9
|
12,862,000
|
19,512,000
|
|||||||||
Trade accounts payable
|
2,336,952
|
2,369,983
|
||||||||||
Accrued expenses
|
7
|
1,002,445
|
1,060,797
|
|||||||||
Accrued dividends
|
12
|
13,050
|
-
|
|||||||||
Deferred revenues
|
996,599
|
803,649
|
||||||||||
Due to related company
|
8
|
903,478
|
1,145,808
|
|||||||||
Derivatives
|
115, 16
|
697,889
|
297,992
|
|||||||||
Total current liabilities
|
18,812,413
|
25,190,229
|
Notes
|
December 31,
2013
|
December 31,
2014
|
||||||||||
Long-term liabilities
|
|
|
||||||||||
Long-term debt, net of current portion
|
9
|
32,782,000
|
34,745,000
|
|||||||||
Derivatives
|
15, 16
|
319,859
|
779
|
|||||||||
Total long-term liabilities
|
33,101,859
|
34,745,779
|
||||||||||
Total liabilities
|
51,914,272
|
59,936,008
|
||||||||||
Commitments and contingencies
|
11
|
|||||||||||
Mezzanine Equity
|
||||||||||||
Preferred shares (redemption of $0 and $32,140,100, respectively)
|
18
|
-
|
30,440,100
|
|||||||||
Shareholders' equity
|
||||||||||||
Common stock (par value $0.03, 200,000,000 shares authorized, 45,723,255 and 57,157,313 issued and outstanding)
|
1,371,698
|
1,714,720
|
||||||||||
Additional paid-in capital
|
252,314,683
|
266,831,088
|
||||||||||
Accumulated deficit
|
(148,984,299
|
)
|
(168,343,304
|
)
|
||||||||
Total shareholders' equity
|
104,702,082
|
100,202,504
|
||||||||||
Total liabilities and shareholders' equity
|
156,616,354
|
190,578,612
|
Notes
|
2012
|
2013
|
2014
|
|||||||||||||
Revenues
|
||||||||||||||||
Voyage revenue
|
54,921,697
|
40,850,051
|
42,586,963
|
|||||||||||||
Related party revenue
|
17
|
240,000
|
240,000
|
240,000
|
||||||||||||
Commissions
(including $641,104, $474,466 and $517,828, respectively, to related party)
|
8, 14
|
(2,673,703
|
)
|
(1,936,381
|
)
|
(2,192,626
|
)
|
|||||||||
Net revenue
|
52,487,994
|
39,153,670
|
40,634,337
|
|||||||||||||
Operating expenses
|
||||||||||||||||
Voyage expenses
|
14
|
1,329,668
|
1,537,898
|
3,963,181
|
||||||||||||
Vessel operating expenses
(including $347,840, $399,665, and $347,363, respectively, to related party)
|
8, 14
|
25,075,139
|
25,191,250
|
25,279,087
|
||||||||||||
Dry-docking expenses
|
1,616,425
|
3,816,699
|
1,975,590
|
|||||||||||||
Vessel depreciation
|
5
|
17,385,608
|
19,983,772
|
12,137,445
|
||||||||||||
Related party management fees
|
8
|
4,984,098
|
4,891,024
|
4,894,559
|
||||||||||||
Other general and administrative expenses
(including $1,850,000, $1,900,000, and $2,000,000, respectively, to related party)
|
8, 12
|
3,661,426
|
3,542,619
|
3,514,636
|
||||||||||||
Net loss on sale of vessels
(including $43,823 and $76,183 to related party)
|
5
|
8,568,234
|
1,935,019
|
-
|
||||||||||||
Impairment loss
|
-
|
78,207,462
|
3,500,000
|
|||||||||||||
Other operating income
|
(254,604
|
)
|
-
|
-
|
||||||||||||
Total operating expenses
|
62,365,994
|
139,105,743
|
55,264,498
|
|||||||||||||
Operating loss
|
(9,878,000
|
)
|
(99,952,073
|
)
|
(14,630,161
|
)
|
||||||||||
Other income/(expenses)
|
||||||||||||||||
Interest and other financing costs
|
(1,977,226
|
)
|
(1,845,776
|
)
|
(2,152,187
|
)
|
||||||||||
Loss on derivatives, net
|
16
|
(637,403
|
)
|
(177,132
|
)
|
(44,648
|
)
|
|||||||||
Foreign exchange gain / (loss)
|
8,321
|
(10,143
|
)
|
40,022
|
||||||||||||
Gain on trading securities
|
20,373
|
-
|
-
|
|||||||||||||
Investment income
|
17
|
-
|
196,196
|
987,604
|
||||||||||||
Interest income
|
484,886
|
387,292
|
422,240
|
|||||||||||||
Other expenses, net
|
(2,101,049
|
)
|
(1,449,563
|
)
|
(746,969
|
)
|
||||||||||
Equity loss in joint venture
|
17
|
(1,219,692
|
)
|
(2,023,191
|
)
|
(2,541,775
|
)
|
|||||||||
Net loss
|
(13,198,741
|
)
|
(103,424,827
|
)
|
(17,918,905
|
)
|
||||||||||
Dividends to Series B preferred shares
|
18
|
-
|
-
|
(1,440,100
|
)
|
|||||||||||
Net loss attributable to common shareholders
|
(13,198,741
|
)
|
(103,424,827
|
)
|
(19,359,005
|
)
|
||||||||||
Loss per share attributable to common shareholders - basic
|
13
|
(0.34
|
)
|
(2.28
|
)
|
(0.35
|
)
|
|||||||||
Weighted average number of shares outstanding during the year, basic
and diluted
|
13
|
38,950,100
|
45,442,841
|
54,794,181
|
Number
of
Shares
|
Common
Stock
Amount
|
Additional Paid - in
Capital
|
Accumulated Deficit
|
Total
|
||||||||||||||||
Balance,
January 1, 2012
|
31,167,211
|
935,017
|
236,843,470
|
(25,856,739
|
)
|
211,921,748
|
||||||||||||||
Net loss
|
(13,198,741
|
)
|
(13,198,741
|
)
|
||||||||||||||||
Issuance of shares in Rights Offering Program, net of issuance costs
|
13,852,094
|
415,562
|
14,252,617
|
-
|
14,668,179
|
|||||||||||||||
Issuance of restricted shares for stock incentive award and share-based compensation
|
300,300
|
9,009
|
662,372
|
-
|
671,381
|
|||||||||||||||
Dividends declared ($0.125 per share)
|
-
|
(4,436,421
|
)
|
(4,436,421
|
)
|
|||||||||||||||
Balance,
December 31, 2012
|
45,319,605
|
1,359,588
|
251,758,459
|
(43,491,901
|
)
|
209,626,146
|
||||||||||||||
Net loss
|
(103,424,827
|
)
|
(103,424,827
|
)
|
||||||||||||||||
Issuance of restricted shares for stock incentive award and share-based compensation
|
403,650
|
12,110
|
556,224
|
-
|
568,333
|
|||||||||||||||
Dividends declared ($0.045 per share)
|
-
|
(2,067,571
|
)
|
(2,067,570
|
)
|
|||||||||||||||
Balance,
December 31, 2013
|
45,723,255
|
1,371,698
|
252,314,683
|
(148,984,299
|
)
|
104,702,082
|
||||||||||||||
Net loss
|
(19,359,005
|
)
|
(19,359,005
|
)
|
||||||||||||||||
Issuance of shares from private placement, net of issuance costs
|
11,164,868
|
334,946
|
14,165,054
|
-
|
14,500,000
|
|||||||||||||||
Issuance of restricted shares for stock incentive award and share-based compensation
|
437,250
|
13,118
|
496,996
|
-
|
510,114
|
|||||||||||||||
Canceled shares due to repurchase program
|
(168,060
|
)
|
(5,042
|
)
|
(145,645
|
)
|
-
|
(150,687
|
)
|
|||||||||||
Balance,
December 31, 2014
|
57,157,313
|
1,714,720
|
266,831,088
|
(168,343,304
|
)
|
100,202,504
|
2012
|
2013
|
2014
|
||||||||||
Cash flows from operating activities:
|
||||||||||||
Net loss
|
(13,198,741
|
)
|
(103,424,827
|
)
|
(17,918,905
|
)
|
||||||
Adjustments to reconcile net loss to net cash provided by / (used in) operating activities:
|
||||||||||||
Depreciation of vessels
|
17,385,608
|
19,983,772
|
12,137,445
|
|||||||||
Impairment loss
|
-
|
78,207,462
|
3,500,000
|
|||||||||
Amortization of deferred charges
|
135,981
|
145,825
|
137,032
|
|||||||||
Loss on sale of vessels
|
8,568,234
|
1,935,019
|
-
|
|||||||||
Share-based compensation
|
671,381
|
568,334
|
510,114
|
|||||||||
Gain on trading securities
|
(20,373
|
)
|
-
|
-
|
||||||||
Proceeds from the sale of trading securities
|
47,846
|
-
|
-
|
|||||||||
Unrealized gain on derivatives
|
(1,057,929
|
)
|
(1,375,820
|
)
|
(718,977
|
)
|
||||||
Investment income accrued
|
-
|
(196,196
|
)
|
(987,604
|
)
|
|||||||
Loss in investment in joint venture
|
1,219,692
|
2,023,191
|
2,541,775
|
|||||||||
Changes in operating assets and liabilities:
|
||||||||||||
(Increase) / decrease in:
|
||||||||||||
Trade accounts receivable
|
(54,285
|
)
|
(453,980
|
)
|
(316,841
|
)
|
||||||
Prepaid expenses
|
(8,196
|
)
|
(22,168
|
)
|
(52,983
|
)
|
||||||
Other receivables
|
14,020
|
869,278
|
596,113
|
|||||||||
Inventories
|
793,899
|
338,522
|
(284,816
|
)
|
||||||||
Due from related company
|
(4,739,739
|
)
|
4,948,443
|
-
|
||||||||
Increase / (decrease) in:
|
||||||||||||
Due to related company
|
-
|
903,478
|
242,330
|
|||||||||
Trade accounts payable
|
476,397
|
(101,764
|
)
|
466,139
|
||||||||
Accrued expenses
|
(545,968
|
)
|
(219,962
|
)
|
(394,155
|
)
|
||||||
Deferred revenue
|
(1,174,721
|
)
|
(96,718
|
)
|
(186,944
|
)
|
||||||
Net cash provided by / (used in) operating activities
|
8,513,106
|
4,031,889
|
(730,277
|
)
|
||||||||
Cash flows from investing activities:
|
||||||||||||
Advances for vessels under construction
|
-
|
(37,820
|
)
|
(15,637,368
|
)
|
|||||||
Contributions to joint venture
|
(3,750,000
|
)
|
(6,250,000
|
)
|
-
|
|||||||
Purchase of a vessel
|
-
|
(5,978,062
|
)
|
(21,323,935
|
)
|
|||||||
Other investments
|
-
|
(5,000,000
|
)
|
-
|
||||||||
Change in retention accounts
|
(55,900
|
)
|
463,596
|
168,322
|
||||||||
Change in restricted cash
|
(3,950,000
|
)
|
1,600,000
|
(300,000
|
)
|
|||||||
Proceeds from sale of vessels
|
4,250,843
|
7,322,818
|
-
|
|||||||||
Net cash used in investing activities
|
(3,505,057
|
)
|
(7,879,468
|
)
|
(37,092,981
|
)
|
||||||
2012
|
2013
|
2014
|
||||||||||
Cash flows from financing activities:
|
||||||||||||
Proceeds from issuance of preferred stock, net of commissions paid
|
-
|
-
|
29,700,000
|
|||||||||
Proceeds from issuance of common stock, net of commissions paid
|
15,237,303
|
-
|
14,550,000
|
|||||||||
Funds used for common stock buyback
|
-
|
-
|
(150,687
|
)
|
||||||||
Offering expenses paid
|
(295,733
|
)
|
(99,200
|
)
|
(564,922
|
)
|
||||||
Dividends paid
|
(4,447,522
|
)
|
(2,090,944
|
)
|
(13,050
|
)
|
||||||
Loan arrangement fees paid
|
-
|
-
|
(299,900
|
)
|
||||||||
Proceeds from long-term debt
|
-
|
-
|
23,300,000
|
|||||||||
Repayment of long-term debt
|
(13,332,000
|
)
|
(15,937,000
|
)
|
(14,687,000
|
)
|
||||||
Net cash (used in) / provided by financing activities
|
(2,837,952
|
)
|
(18,127,144
|
)
|
51,834,441
|
|||||||
Net increase / (decrease) in cash and cash equivalents
|
2,170,097
|
(21,974,723
|
)
|
14,011,183
|
||||||||
Cash and cash equivalents at beginning of year
|
31,204,863
|
33,374,960
|
11,400,237
|
|||||||||
Cash and cash equivalents at end of year
|
33,374,960
|
11,400,237
|
25,411,420
|
|||||||||
Supplemental cash flow information
Cash paid for interest
|
1,839,322
|
1,734,967
|
2,000,850
|
|||||||||
Non cash financing and investing activities :
|
||||||||||||
Offering expenses accrued
|
30,000
|
66,478
|
452,708
|
|||||||||
"Payment-in-kind" dividends
|
-
|
-
|
1,440,100
|
· | Allendale Investment S.A. incorporated in Panama on January 22, 2002, owner of the Panama flag 18,154 deadweight tons ("DWT") / 1,169 twenty-foot equivalent ("TEU" – a measure of carrying capacity in containers) container carrier M/V "Kuo Hsiung", which was built in 1993 and acquired on May 13, 2002. |
· | Alterwall Business Inc. incorporated in Panama on January 15, 2001, owner of the Panama flag 18,253 DWT / 1,169 TEU container carrier M/V "Ninos" (previously named M/V "Quingdao I") which was built in 1990 and acquired on February 16, 2001. |
· | Diana Trading Ltd. incorporated in the Marshall Islands on September 25, 2002, owner of the Marshall Islands flag 69,734 DWT bulk carrier M/V "Irini", which was built in 1988 and acquired on October 15, 2002. M/V "Irini" was sold on July 10, 2013. |
· | Xenia International Corp., incorporated in the Marshall Islands on April 6, 2006, owner of the Marshall Islands flag 22,568 DWT / 950 TEU multipurpose M/V "Tasman Trader", which was built in 1990 and acquired on April 27, 2006. On March 7, 2012, the vessel was renamed M/V "Anking". On June 4, 2013 the vessel was sold. |
· | Prospero Maritime Inc., incorporated in the Marshall Islands on July 21, 2006, owner of the Marshall Islands flag 69,268 DWT dry bulk M/V "Aristides N.P.", which was built in 1993 and acquired on September 21, 2006. |
· | Xingang Shipping Ltd., incorporated in Liberia on October 16, 2006, owner of the Liberian flag 23,596 DWT / 1,599 TEU container carrier M/V "YM Xingang I" , which was built in February 1993 and acquired on November 15, 2006. On July 11, 2009, the vessel was renamed M/V "Mastro Nicos" and on November 5, 2009, it was renamed M/V "YM Port Kelang". On October 25, 2011 the vessel was renamed M/V "Marinos". |
· | Manolis Shipping Ltd., incorporated in the Marshall Islands on March 16, 2007, owner of the Marshall Islands flag 20,346 DWT / 1,452 TEU container carrier M/V "Manolis P", which was built in 1995 and acquired on April 12, 2007. |
· | Eternity Shipping Company, incorporated in the Marshall Islands on May 17, 2007, owner of the Marshall Islands flag 30,007 DWT / 1,742 TEU container carrier M/V "Clan Gladiator", which was built in 1992 and acquired on June 13, 2007. On May 9, 2008, M/V "Clan Gladiator" was renamed M/V "OEL Transworld" and on August 31, 2009 the vessel was renamed M/V "Captain Costas". |
· | Emmentaly Business Inc., incorporated in Panama on July 4, 2007, owner of the Panamanian flag 33,667 DWT / 1,932 TEU container carrier M/V "Jonathan P", which was built in 1990 and acquired on August 7, 2007. On April 16, 2008, M/V "Jonathan P" was renamed M/V "OEL Integrity"; on March 5, 2009, the vessel was renamed again M/V "Jonathan P" upon the expiration of its charter with Orient Express Lines. M/V "Jonathan P" was sold on March 16, 2012. |
· | Pilory Associates Corp., incorporated in Panama on July 4, 2007, owner of the Panamanian flag 33,667 DWT / 1,932 TEU container carrier M/V "Despina P", which was built in 1990 and acquired on August 13, 2007. |
· | Tiger Navigation Corp., incorporated in Marshall Islands on August 29, 2007, owner of the Marshall Islands flag 31,627 DWT / 2,228 TEU container carrier M/V "Tiger Bridge", which was built in 1990 and acquired on October 4, 2007. |
· | Noumea Shipping Ltd, incorporated in Marshall Islands on May 14, 2008, owner of the Marshall Islands flag 34,677 DWT / 2,556 TEU container carrier M/V "Maersk Noumea", which was built in 2001 and acquired on May 22, 2008. |
· | Saf-Concord Shipping Ltd., incorporated in Liberia on June 8, 2008, owner of the Liberian flag 46,667 DWT bulk carrier M/V "Monica P", which was built in 1998 and acquired on January 19, 2009. |
· | Eleni Shipping Ltd., incorporated in Liberia on February 11, 2009, owner of the Liberian flag 72,119 DWT bulk carrier M/V "Eleni P", which was built in 1997 and acquired on March 6, 2009. |
· | Pantelis Shipping Ltd., incorporated in the Republic of Malta on July 2, 2009, owner of the Maltese flag 74,020 DWT bulk carrier M/V "Pantelis" which was built in 2000 and acquired on July 23, 2009. On December 15, 2009, ownership of the vessel was transferred to Pantelis Shipping Corp., incorporated in Liberia, and the vessel changed its flag to the Liberian flag. |
· | Aggeliki Shipping Ltd., incorporated in the Republic of Liberia on May 21, 2010, owner of the Liberian flag 30,306 DWT / 2008 TEU container carrier M/V "Aggeliki P" which was built in 1998 and acquired on June 21, 2010. |
· | Joanna Maritime Ltd., incorporated in Liberia on June 10, 2013, owner of the Liberian flag 22,301 DWT / 1,732 TEU container carrier M/V "Joanna" which was built in 1999 and acquired on July 4, 2013. |
· | Eirini Shipping Ltd., incorporated in the Republic of Liberia on February 2, 2014, owner of the Liberian flag 76,466 DWT bulk carrier M/V "Eirini P" which was built in 2004 and acquired on May 26, 2014. |
· | Ultra One Shipping Ltd., incorporated in the Republic of Liberia on November 21, 2013, entered on November 29, 2013, into a shipbuilding contract with Yangzhou Dayang Shipbuilding Co., Ltd. and Sumec Marine Co., Ltd., for the construction of a 63,500 DWT bulk carrier (Hull No. DY160). The vessel is expected to be delivered at the end of November, 2015. |
· | Ultra Two Shipping Ltd., incorporated in the Republic of Liberia on November 21, 2013, entered on November 29, 2013, into a shipbuilding contract with Yangzhou Dayang Shipbuilding Co., Ltd. and Sumec Marine Co., Ltd., for the construction of a 63,500 DWT bulk carrier (Hull No. DY161). The vessel is expected to be delivered at the end of January, 2016. |
· | Kamsarmax One Shipping Ltd., incorporated in the Republic of the Marshall Islands on April 4, 2014, agreed to acquire from Klaveness Bulk AS, the 82,000 DWT bulk carrier Hull No. YZJ2013-1116. The vessel is a new-building to be delivered at the end of December, 2015. |
· | Kamsarmax Two Shipping Ltd., incorporated in the Republic of the Marshall Islands on April 4, 2014, entered on April 4, 2014, into a shipbuilding contract with Jiangsu Tianyuan Marine Import & Export Co., Ltd., and Jiangsu Yangzijiang Shipbuilding Co., Ltd. and Jiangsu New Yangzi Shipbuilding Co., Ltd., for the construction of a 82,000 DWT bulk carrier (Hull No. YZJ2013-1153). The vessel is expected to be delivered in October, 2016. |
2. | Significant Accounting Policies - Continued |
2. | Significant Accounting Policies - Continued |
2. | Significant Accounting Policies - Continued |
3. | Inventories |
2013
|
2014
|
|||||||
Lubricants
|
1,293,780
|
1,226,172
|
||||||
Victualing
|
180,334
|
186,188
|
||||||
Bunkers
|
-
|
346,570
|
||||||
Total
|
1,474,114
|
1,758,930
|
5. | Vessels, net |
5. | Vessels, net - continued |
6. | Deferred Charges, net |
2013
|
2014
|
|||||||
Balance, beginning of year
|
318,578
|
338,431
|
||||||
Amortization of loan arrangement fees
|
(145,825
|
)
|
(137,032
|
)
|
||||
Deferred offering expenses
|
165,678
|
(165,678
|
)
|
|||||
Loan arrangement fees
|
-
|
299,900
|
||||||
Balance, end of year
|
338,431
|
335,621
|
As of December 31,
2013
|
As of December 31,
2014
|
|||||||
Accrued payroll expenses
|
224,396
|
218,887
|
||||||
Accrued interest
|
82,589
|
96,894
|
||||||
Accrued general and administrative expenses
|
167,485
|
181,593
|
||||||
Accrued commissions
|
157,803
|
94,778
|
||||||
Other accrued expenses
|
370,172
|
468,645
|
||||||
Total
|
1,002,445
|
1,060,797
|
8. | Related Party Transactions |
8. | Related Party Transactions - Continued |
9. | Long-Term Debt |
Borrower
|
December 31,
2013 |
December 31,
2014 |
|||||||
Xingang Shipping Ltd. / Alcinoe Shipping Ltd
|
(a)
|
5,000,000
|
4,200,000
|
||||||
Manolis Shipping Ltd.
|
(b)
|
5,840,000
|
5,200,000
|
||||||
Saf-Concord Shipping Ltd.
|
(c)
|
5,250,000
|
4,250,000
|
||||||
Eleni Shipping Ltd.
|
(d)
|
5,400,000
|
-
|
||||||
Pantelis Shipping Corp.
|
(e)
|
7,360,000
|
6,240,000
|
||||||
Aggeliki Shipping Ltd.
|
(f)
|
4,864,000
|
3,652,000
|
||||||
Noumea Shipping Ltd.
|
(g)
|
11,930,000
|
9,240,000
|
||||||
Eirini Shipping Ltd. / Eleni Shipping Ltd.
|
(h)
|
-
|
14,600,000
|
||||||
Euroseas Ltd.
|
(i)
|
-
|
6,875,000
|
||||||
45,644,000
|
54,257,000
|
||||||||
Less: Current portion
|
(12,862,000
|
)
|
(19,512,000
|
)
|
|||||
Long-term portion
|
32,782,000
|
34,745,000
|
To December 31:
|
||||
2015
|
19,512,000
|
|||
2016
|
15,070,000
|
|||
2017
|
9,275,000
|
|||
2018
|
1,400,000
|
|||
Thereafter
|
9,000,000
|
|||
Total
|
$
|
54,257,000
|
(a) |
This is a $20,000,000 loan drawn by Xingang Shipping Ltd. on November 15, 2006; Joanna Maritime Ltd, owner of M/V "Joanna" is a guarantor to this loan. The loan is payable in eight consecutive quarterly installments of $1.0 million each, the first of which was due in February 2007, followed by four consecutive quarterly installments of $750,000 each, followed by sixteen consecutive installments of $250,000 each and a balloon payment of $5.0 million payable with the final quarterly installment due in November 2013. The interest was based on LIBOR plus a margin of 0.935% initially; after Alcinoe Shipping Ltd. became a guarantor the rate became 0.90%.
On April 5, 2013, an Addendum was signed by which the balloon payment of $5.0 million will be repaid by eight consecutive quarterly instalments of $200,000 each starting in February 2014 plus a balloon payment of $3,400,000 payable with the final quarterly instalment on November 15, 2015. The interest is based on LIBOR plus a margin of 5.30%. As of the November 1, 2013 and thereafter at any time throughout the repayment of the loan a minimum deposit of $400,000 is to be maintained with the bank. The loan is secured with the following: (i) first priority mortgage over M/V "Marinos" owned by Xingang Shipping Ltd, (ii) first assignment of earnings and insurance, (iii) a corporate guarantee of Euroseas Ltd. and (iv) a mortgage on M/V "Joanna". Other covenants and guarantees are similar to the rest of the loans of the Company. |
(b) | This is a $10,000,000 loan drawn by Manolis Shipping Ltd. on June 11, 2007. The loan is payable in thirty-two consecutive quarterly instalments of $160,000 each, the first of which was due in September 2007, plus a balloon payment of $4,880,000 payable with the final quarterly instalment in June 2015. The interest is based on LIBOR plus a margin of 0.80% if the ratio of the outstanding loan to the vessel value is below 55%, otherwise the margin is 0.90%. The loan is secured with the following: (i) first priority mortgage over M/V "Manolis P", (ii) first assignment of earnings and insurance, (iii) a corporate guarantee of Euroseas Ltd. and (iv) a minimum cash balance equal to an amount of no less than $300,000 in an account Manolis Shipping Ltd. maintains with the bank. Other covenants and guarantees are similar to the rest of the loans of the Company. |
(c) | This loan is a $10,000,000 loan drawn by SAF-Concord Shipping Ltd. on January 19, 2009. The loan was payable in twenty consecutive quarterly instalments of $250,000 each, the first of which was due in April 2009, plus a balloon payment of $5,000,000 payable with the final quarterly instalment in January 2014. The interest was based on LIBOR plus a margin of 2.50%. The loan was secured with the following: (i) first priority mortgage over M/V "Monica P", (ii) first assignment of earnings and insurance, (iii) a corporate guarantee of Euroseas Ltd. and (iv) a minimum cash balance equal to an amount of no less than $300,000 in an account SAF-Concord Shipping Ltd. maintains with the bank. Other covenants and guarantees are similar to the rest of the loans of the Company. |
(d) | This loan is a $10,000,000 loan drawn by Eleni Shipping Ltd. on April 30, 2009. The loan is payable in 10 consecutive semi-annual instalments, two in the amount of $100,000, two in the amount of $400,000, two in the amount of $600,000 and four in the amount of $800,000, with a $4.6 million balloon payment to be paid together with the last instalment in April 2014. The margin of the loan is 2.50% above LIBOR for the $5.4 million repaid throughout the 5 years and 2.70% above LIBOR for the amount of the balloon payment. The loan is secured with the following: (i) first priority mortgage over M/V "Eleni P", (ii) first assignment of earnings and insurance, (iii) a corporate guarantee of Euroseas Ltd. and (iv) a minimum cash balance equal to an amount of no less than $300,000 in an account Eleni Shipping Ltd. maintains with the bank. Other covenants and guarantees are similar to the rest of the loans of the Company. The loan was fully paid within 2014. |
(e) | This loan is a $13,000,000 loan drawn by Pantelis Shipping Corp. on December 15, 2009. The loan is payable in 32 consecutive quarterly instalments, four in the amount of $500,000 and twenty-eight in the amount of $280,000, with a $3.16 million balloon payment to be paid together with the last instalment in December 2017. The margin of the loan is 2.70% above LIBOR. The loan is secured with the following: (i) first priority mortgage over M/V "Pantelis", (ii) first assignment of earnings and insurance, (iii) a corporate guarantee of Euroseas Ltd. and (iv) a minimum cash balance equal to an amount of no less than $300,000 in an account Pantelis Shipping Corp. maintains with the bank. Other covenants and guarantees are similar to the rest of the loans of the Company. |
(f) | This loan is an $8,500,000 loan drawn by Aggeliki Shipping Ltd. on November 5, 2010. The loan is payable in 20 equal consecutive quarterly instalments of $303,000 each, with a $2.44 million balloon payment to be paid together with the last instalment in November 2015. The margin of the loan is 2.85% above LIBOR. The loan is secured with the following: (i) first priority mortgage over M/V "Aggeliki P.", (ii) first assignment of earnings and insurance, (iii) a corporate guarantee of Euroseas Ltd. Other covenants and guarantees are similar to the rest of the loans of the Company. |
(g) | This loan is a $20,000,000 loan drawn by Noumea Shipping Ltd. on December 28, 2010. The loan consists of two tranches: Tranche A of $15,000,000 payable in 12 equal consecutive six-monthly instalments of $720,000 each with a $6.36 million balloon payment to be paid together with the last instalment in December 2016; and, Tranche B of $5,000,000 payable in 8 equal consecutive six-monthly instalments of $625,000 each running in parallel with Tranche A. The margin of both tranches is 2.65% above LIBOR, however, if the collateral vessel, M/V "Maersk Noumea", does not have a charter, the margin of Tranche B becomes 4% above LIBOR and any balance remaining thereof, to be repaid not later that the original Tranche B Maturity, as an Interim Balloon. The loan is secured with the following: (i) first priority mortgage over M/V "Maersk Noumea", (ii) second priority mortgage over M/V "Aristides N.P.", (iii) first assignment of earnings and insurance, (iv) a corporate guarantee of Euroseas Ltd. Other covenants and guarantees are similar to the rest of the loans of the Company. |
(h) |
This loan is a $15,300,000 loan drawn by Eirini Shipping Ltd. and Eleni Shipping Ltd. jointly, on June 25, 2014. The loan is payable in 20 equal consecutive quarterly instalments of $350,000 each, with an $8.3 million balloon payment to be paid together with the last instalment in June 2019. The margin of the loan is 3.75% above LIBOR. The loan is secured with the following: (i) first priority mortgage over M/V "Eirini P." and M/V "Eleni P.", (ii) first assignment of earnings and insurance, (iii) a corporate guarantee of Euroseas Ltd. Other covenants and guarantees are similar to the rest of the loans of the Company.
|
(i) | This loan is an $8,000,000 loan drawn by Euroseas Ltd., on February 3, 2014. The loan is payable in 12 equal consecutive quarterly instalments of $375,000 each, with a $3.5 million balloon payment to be paid together with the last instalment in February 2017. The margin of the loan is 6.0% above LIBOR. The loan is secured with the following: (i) first priority mortgage over M/V "Kuo Hsiung.", M/V "Aristides N. P.", M/V "Captain Costas" and M/V "Despina P", (ii) first assignment of earnings and insurance, (iii) a corporate guarantee of Euroseas Ltd. Other covenants and guarantees are similar to the rest of the loans of the Company. |
11. | Commitments and Contingencies |
(a) |
There are no material legal proceedings to which the Company is a party or to which any of its properties are subject, other than routine litigation incidental to the Company's business. In the opinion of the management, the disposition of these lawsuits should not have a material impact on the consolidated results of operations, financial position and cash flows.
|
(b) |
There is no future minimum long-term time charter revenue based on non-cancelable time charter contracts as of December 31, 2014.
|
(c) | As of December 31, 2014, the Company had under construction four bulk carriers with a total contracted amount remaining to be paid of $98.60 million as of December 31, 2014, with $54.64 million payable in 2015 and $43.96 million in 2016. The Company has secured bank financing for two of the vessels for up to $38.95 million and will finance the remaining commitments with additional bank debt for the remaining two vessels, own cash and by raising additional equity. |
12. | Stock Incentive Plan |
a) | On November 4, 2011 an award of 290,000 non-vested restricted shares under the 2010 Plan, was made to 17 key persons of which 50% vested on July 1, 2012 and 50% vested on July 1, 2013; awards to officers and directors amounted to 164,000 shares and the remaining 126,000 shares were awarded to employees of Eurobulk. |
b) | On June 28, 2012 an award of 119,200 non-vested restricted shares under the 2010 Plan, was made to 17 key persons of which 46,400 shares vested on July 1, 2012, 26,400 shares vested on November 16, 2012 and 46,400 shares vested on July 1, 2013; awards to officers and directors amounted to 68,480 shares and the remaining 50,720 shares were awarded to employees of Eurobulk. |
c) | On November 3, 2012 an award of 435,000 non-vested restricted shares under the 2010 Plan, was made to 17 key persons of which 50% vested on November 16, 2013 and 50% vested on November 16, 2014; awards to officers and directors amounted to 246,000 shares and the remaining 189,000 shares were awarded to employees of Eurobulk. |
d) | On November 21, 2013 an award of 450,000 non-vested restricted shares under the 2010 Plan, was made to 19 key persons of which 50% vested on July 1, 2014 and 50% will vest on July 1, 2015; awards to officers and directors amounted to 253,500 shares and the remaining 196,500 shares were awarded to employees of Eurobulk. |
e) | On November 3, 2014 an award of 450,000 non-vested restricted shares under the 2014 Plan, was made to 19 key persons of which 50% will vest on November 16, 2015 and 50% on November 16, 2016; awards to officers and directors amounted to 261,000 shares and the remaining 189,000 shares were awarded to employees of Eurobulk. |
12. | Stock Incentive Plan - continued |
Non-vested Shares
|
Shares
|
Weighted-Average
Grant-Date Fair Value
|
Non-vested on January 1, 2014
|
662,250
|
1.13
|
Granted
|
450,000
|
1.02
|
Vested
|
(437,250)
|
1.13
|
Non-vested on December 31, 2014
|
675,000
|
1.06
|
13. | Earnings / (Loss) Per Share |
2012
|
2013
|
2014
|
||||||||||
Income:
|
||||||||||||
Net loss attributable to common shareholders'
|
(13,198,741
|
)
|
(103,424,827
|
)
|
(19,359,005
|
)
|
||||||
Basic earnings per share:
|
||||||||||||
Weighted average common shares –
Outstanding
|
38,950,100
|
45,442,841
|
54,794,181
|
|||||||||
Basic loss per share
|
(0.34
|
)
|
(2.28
|
)
|
(0.35
|
)
|
||||||
Effect of dilutive securities
|
||||||||||||
Weighted average common shares –
Outstanding
|
38,950,100
|
45,442,841
|
54,794,181
|
|||||||||
Diluted loss per share
|
(0.34
|
)
|
(2.28
|
)
|
(0.35
|
)
|
Year ended December 31,
|
||||||||||||
2012
|
2013
|
2014
|
||||||||||
Voyage expenses
|
||||||||||||
Port charges and canal dues
|
442,783
|
364,091
|
1,214,856
|
|||||||||
Bunkers
|
886,885
|
1,173,807
|
2,748,325
|
|||||||||
Total
|
1,329,668
|
1,537,898
|
3,963,181
|
|||||||||
Vessel operating expenses
|
||||||||||||
Crew wages and related costs
|
13,864,535
|
13,921,033
|
13,985,377
|
|||||||||
Insurance
|
2,435,144
|
2,222,912
|
2,364,112
|
|||||||||
Repairs and maintenance
|
511,569
|
478,197
|
501,733
|
|||||||||
Lubricants
|
2,846,087
|
2,836,561
|
2,379,191
|
|||||||||
Spares and consumable stores
|
4,083,590
|
4,204,965
|
4,083,942
|
|||||||||
Professional and legal fees
|
137,047
|
158,978
|
498,240
|
|||||||||
Other
|
1,197,167
|
1,368,604
|
1,466,492
|
|||||||||
Total
|
25,075,139
|
25,191,250
|
25,279,087
|
Year ended December 31,
|
||||||||||||
2012
|
2013
|
2014
|
||||||||||
Third parties
|
2,032,599
|
1,461,915
|
1,674,798
|
|||||||||
Related parties (see Note 8)
|
641,104
|
474,466
|
517,828
|
|||||||||
2,673,703
|
1,936,381
|
2,192,626
|
Fair Value Measurement as of December 31, 2014
|
||||
Total |
(Level 1)
|
(Level 2)
|
(Level 3)
|
Liabilities
|
||||
Interest rate swap
contracts, current and
long-term portion
|
$298,771
|
-
|
$298,771 |
- |
Fair Value Measurement as of December 31, 2013
|
||||
Total, |
l (Level 1)
|
(Level 2)
|
(Level 3)
|
Liabilities
|
||||
Interest rate swap contracts, current and long-term portion
|
$1,017,748
|
-
|
$1,017,748 |
-
|
Vessel
|
Significant Other Observable
Inputs (Level 2) (amounts in $million)
|
Loss
(amounts in $million)
|
M/V Ninos
|
$2.7
|
$1.1
|
M/V Kuo Hsiung
|
$2.8
|
$1.6
|
M/V YM Xingang
|
$3.0
|
$7.8
|
M/V Manolis P
|
$3.8
|
$8.3
|
M/V Cpt Costas
|
$3.8
|
$10.6
|
M/V Despina P
|
$3.9
|
$6.2
|
M/V Tiger Bridge
|
$3.8
|
$9.3
|
M/V Aggeliki
|
$7.5
|
$5.8
|
M/V Evridiki
|
$13.0
|
$27.5
|
TOTAL
|
$44.3
|
$78.2
|
Vessel
|
Significant Other Observable
Inputs (Level 2) (amounts in $million)
|
Loss
(amounts in $million)
|
M/V Aristides NP
|
$5.1
|
$3.5
|
Fair Value at December 31, 2014
|
Valuation Technique
|
Unobservable Input
|
Value
|
|
Other investment
|
6,183,800
|
Discounted cash flow
|
Rate of return
|
19%
|
Derivatives not designated as hedging instruments
|
Balance Sheet Location
|
December 31, 2013
|
December 31, 2014
|
||||||
Interest rate swap contracts
|
Current liabilities – Derivatives
|
697,889
|
297,992
|
||||||
Interest rate contracts
|
Long-term liabilities – Derivatives
|
319,859
|
779
|
||||||
Total derivative liabilities
|
1,017,748
|
298,771
|
Derivatives not designated as hedging instruments
|
Location of gain (loss) recognized
|
Year Ended December 31, 2012
|
Year Ended December 31, 2013
|
Year Ended December 31, 2014
|
|||||||||
FFA contracts – Fair value
|
Change in fair value of derivatives
|
-
|
-
|
-
|
|||||||||
FFA contracts - Realized loss
|
Change in fair value of derivatives
|
(2,247
|
)
|
-
|
-
|
||||||||
Interest rate – Fair value
|
Change in fair value of derivatives
|
1,057,928
|
1,375,820
|
718,977
|
|||||||||
Interest rate contracts - Realized loss
|
Change in fair value of derivatives
|
(1,693,084
|
)
|
(1,552,952
|
)
|
(763,625
|
)
|
||||||
Total loss on derivatives
|
(637,403
|
)
|
(177,132
|
)
|
(44,648
|
)
|
17. | Investment in Joint Venture and Other Investment |
2012
|
2013
|
2014
|
||||||||||
Current assets
|
4,582,256
|
11,207,156
|
9,520,607
|
|||||||||
Non current assets
|
248,337,400
|
268,669,047
|
252,531,888
|
|||||||||
Current liabilities
|
6,051,143
|
4,079,748
|
16,194,148
|
|||||||||
Non current liabilities
|
127,316,330
|
127,350,355
|
115,181,837
|
|||||||||
Members' contributions
|
132,000,000
|
175,000,000
|
175,000,000
|
|||||||||
Voyage revenue
|
27,478,223
|
27,510,792
|
31,663,989
|
|||||||||
Net revenue
|
26,216,805
|
26,163,274
|
30,269,066
|
|||||||||
Operating loss
|
(2,018,854
|
)
|
(7,313,783
|
)
|
(11,058,601
|
)
|
||||||
Net loss
|
(8,413,047
|
)
|
(14,106,082
|
)
|
(17,798,476
|
)
|
17. | Investment in Joint Venture and Other Investment - continued |
In USD
|
Other Investment
|
Balance, January 1, 2013
|
0
|
Invested amount
|
5,000,000
|
Total gain for period included in Investment
income
|
196,196
|
Balance, December 31, 2013
|
5,196,196
|
Total gain for period included in Investment
income
|
987,604
|
Balance, December 31, 2014
|
6,183,800
|
Number
of
Shares
|
Preferred Shares
Amount
|
Dividends
paid-in-kind
|
Total
|
|||||||||||||
Balance,
January 1, 2014
|
-
|
-
|
-
|
-
|
||||||||||||
Issuance of preferred shares from private placement net of issuance costs
|
30,700
|
29,000,000
|
29,000,000
|
|||||||||||||
Dividends declared
|
1,440
|
1,440,100
|
1,440,100
|
|||||||||||||
Balance,
December 31, 2014
|
32,140
|
29,000,000
|
1,440,100
|
30,440,100
|
a) |
On January 27, 2015 the Company paid the second instalment of $3.05 million for one of its two Kamsarmax (Hull No. YZJ2013-1116) newbuilding vessels contracts.
|
b) |
On January 12, 2015, the Company signed a term loan facility with HSBC of up to the maximum of $19.95 million or 70% of the vessel's market value upon delivery if the ship is under an Approved Charter (lesser of) or 65% of the vessel's market value upon delivery if the vessel is charter free. The facility will be used to partly finance the construction cost of Hull No. DY 160 and will be repaid over 5 years following the delivery of the vessel. Hull No. DY 160 will serve as collateral to the loan.
|
c) | On March 20, 2015, the Company signed a term loan facility with HSH of up to the maximum of $19.00 million or 62.5% of the vessel's market value upon delivery (lesser of). The facility will be used to partly finance the construction cost of Hull No. DY 161 and will be repaid over 4 years following the delivery of the vessel. Hull No. DY 161 will serve as collateral to the loan. |
|
Euroseas Ltd.
|
||
|
|
||
|
|
||
|
By:
|
/s/ Aristides J. Pittas
|
|
|
Name:
|
Aristides J. Pittas
|
|
|
Title:
|
CEO
|
|
|
|
|
|
|
|
||
|
|
||
|
Eurobulk Ltd.
|
||
|
|
||
|
|
||
|
By:
|
/s/ Nikolaos Pittas
|
|
|
Name:
|
Nikolaos Pittas
|
|
|
Title:
|
Director
|
|
|
|
|
|
1.1. | Purpose |
1.2. | Administration |
1.3. | Persons Eligible for Awards |
1.4. | Types of Awards |
1.5. | Shares Available for Awards; Adjustments for Changes in Capitalization |
(A) | The number and type of securities or other property subject to each outstanding Award and the Exercise Price or grant price thereof, if applicable, shall be equitably adjusted; and |
(B) | The Administrator shall make such equitable adjustments, if any, as the Administrator may deem appropriate to reflect such Equity Restructuring with respect to the aggregate number and kind of shares that may be issued under the Plan (including, but not limited to, adjustment of the limitation set forth in Section 1.5(a)). The adjustments provided under this Section 1.5(c)(iv) shall be nondiscretionary and shall be final and binding on the affected participant and the Company. |
1.6. | Definitions of Certain Terms |
(A) | any failure by the grantee substantially to perform the grantee's employment or consultancy/service or Board membership duties; |
(B) | any excessive unauthorized absenteeism by the grantee; |
(C) | any refusal by the grantee to obey the lawful orders of the Board or any other Person to whom the grantee reports; |
(D) | any act or omission by the grantee that is or may be injurious to the Company, any Subsidiary or any Affiliate, whether monetarily, reputationally or otherwise; |
(E) | any act by the grantee that is inconsistent with the best interests of the Company, any Subsidiary or any Affiliate; |
(F) | the grantee's gross negligence that is injurious to the Company, any Subsidiary or any Affiliate, whether monetarily, reputationally or otherwise; |
(G) | the grantee's material violation of any of the policies of the Company, a Subsidiary or any Affiliate, as applicable, including, without limitation, those policies relating to discrimination or sexual harassment; |
(H) | the grantee's material breach of his or her employment or service contract with the Company, any Subsidiary or any Affiliate; |
(I) | the grantee's unauthorized (1) removal from the premises of the Company, any Subsidiary or an Affiliate of any document (in any medium or form) relating to the Company, any Subsidiary or an Affiliate or the customers or clients of the Company, any Subsidiary or an Affiliate or (2) disclosure to any Person of any of the Company's, any Subsidiary's or any Affiliate's, confidential or proprietary information; |
(J) | the grantee's being convicted of, or entering a plea of guilty or nolo contendere to, any crime that constitutes a felony or involves moral turpitude; and |
(K) | the grantee's commission of any act involving dishonesty or fraud. |
2.1. | Agreements Evidencing Awards |
2.2. | Grant of Stock Options and Stock Appreciation Rights |
2.3. | Exercise of Options and Stock Appreciation Rights |
2.4. | Termination of Employment/Service; Death Subsequent to a Termination of Employment/Service |
(e) | Death . |
2.6. | Grant of Restricted Stock |
2.7. | Grant of Restricted Stock Units |
2.9. | Grant of Phantom Stock Units |
3.1. | Amendment of the Plan; Modification of Awards |
3.2. | Consent Requirement |
3.3. | Nonassignability |
3.4. | Taxes |
3.5. | Change in Control |
3.6. | Operation and Conduct of Business |
3.7. | No Rights to Awards |
3.8. | Right of Discharge Reserved |
3.9. | Non-Uniform Determinations |
3.10. | Other Payments or Awards |
3.11. | Headings |
3.12. | Effective Date and Term of Plan |
3.13. | Restriction on Issuance of Stock Pursuant to Awards |
3.14. | Requirement of Notification of Election Under Section 83(b) of the Code |
3.15. | Severability |
3.17. | Forfeiture; Clawback |
3.18. | No Trust or Fund Created |
3.19. | No Fractional Shares |
1
|
PURPOSE
|
2
|
2
|
DEFINITIONS
|
2
|
3
|
THE FACILITY- AVAILABILITY
|
22
|
4
|
HEDGING STRATEGY
|
23
|
5
|
NOTICE OF DRAWDOWN
|
25
|
6
|
INTEREST PERIODS
|
26
|
7
|
INTEREST
|
27
|
8
|
DEFAULT INTEREST
|
27
|
9
|
SUBSTITUTE BASIS
|
28
|
10
|
PREPAYMENT
|
29
|
11
|
REPAYMENT
|
32
|
12
|
APPLICATION
|
33
|
13
|
EVIDENCE OF DEBT
|
34
|
14
|
PAYMENTS
|
34
|
15
|
TAX GROSS UP AND INDEMNITIES
|
35
|
16
|
CHANGE OF CIRCUMSTANCES
|
40
|
17
|
REPRESENTATIONS AND WARRANTIES
|
41
|
18
|
SECURITIES
|
47
|
19
|
CONDITIONS PRECEDENT AND SUBSEQUENT
|
47
|
20
|
GENERAL UNDERTAKINGS
|
50
|
21
|
INSURANCE UNDERTAKINGS
|
56
|
22
|
OPERATIONAL UNDERTAKINGS
|
58
|
23
|
SECURITY MARGIN
|
63
|
24
|
EVENTS OF DEFAULT
|
63
|
25
|
SET-OFF
|
67
|
26
|
FEES
|
68
|
27
|
EARNINGS AND RETENTION ACCOUNTS
|
68
|
28
|
EXPENSES
|
70
|
29
|
INDEMNITY
|
70
|
30
|
ENVIRONMENTAL INDEMNITY
|
70
|
31
|
CONFIDENTIALITY
|
70
|
32
|
LENDER'S BUSINESS
|
72
|
33
|
STAMP DUTIES- TAXES ETC
|
72
|
34
|
DETERMINATIONS
|
72
|
35
|
NO WAIVER
|
73
|
36
|
PARTIAL INVALIDITY
|
73
|
37
|
TRANSFER AND ASSIGNMENT
|
73
|
38
|
NON-IMMUNITY
|
74
|
39
|
NOTICES
|
74
|
40
|
SUPPLEMENTAL
|
75
|
41
|
LAW AND JURISDICTION
|
76
|
42
|
THIS AGREEMENT AND THE OTHER FINANCE DOCUMENTS
|
77
|
EXECUTION PAGE
|
78
|
|
SCHEDULE1
|
79
|
|
SCHEDULE 2
|
81
|
1 | PURPOSE |
1.01 | This Agreement sets out the terms and conditions on which the Lender has agreed to make available to the Borrower, as borrower, a term loan facility, up to the maximum amount of Nineteen million Nine hundred Fifty thousand Dollars ($19,950,000) in one (1) advance, for the purpose of assisting the Borrower in partly financing the Construction Cost of the Ship. |
1.02 | The Borrower has the option to hedge its exposure under this Agreement to interest rate fluctuations by entering into interest rate swap transactions with the Lender at the times and in the manner hereinafter set forth. |
2 | DEFINITIONS |
2.01 | In this Agreement the following terms shall have the following meanings: |
(a) | the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to: |
(i) | cast, or control the casting of, more than fifty per cent (50%) of the maximum number of votes that might be cast at a general meeting of such body corporate; or |
(ii) | appoint or remove all, or the majority, of the directors or other equivalent officers of such body corporate; or |
(ii) | give directions with respect to the operating and financial polices of such body corporate with which the directors or other equivalent officers of such body corporate are obliged to comply; and/or |
(b) | the holding beneficially of more than fifty per cent (50%) of the issued share capital of such body corporate (excluding any part of that issued capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital), |
(a) | Financial Indebtedness of the debtor; |
(b) | liability for any credit to the debtor from a supplier of goods or services or under any instalment purchase or payment plan or other similar arrangement; |
(c) | contingent liabilities of the debtor (including without limitation any taxes or other payments under dispute) which have been or, under the Applicable Accounting Principles consistently applied, should be recorded in the notes to the Accounting Information; |
(d) | deferred tax of the debtor; and |
(e) | liability under a guarantee, indemnity or similar obligation entered into by the debtor in respect of a liability of another person who is not a member of the Group which would fall within (a) to (d) above if the references to the debtor referred to the other person; |
a) | it is entered into by the Borrower pursuant to the Master Agreement with the Lender; |
b) | its purpose is the hedging of the Borrower's exposure under this Agreement to fluctuations in LIBOR arising from the funding of the Facility; and |
c) | it is designated by the Borrower, by delivery by the Borrower to the Lender of a notice of designation as a Designated Transaction for the purposes of the Finance Documents; |
(a) |
any claim by or directive from any applicable governmental, judicial or regulatory authority alleging breach of, or non-compliance with any Environmental Laws or Environmental Approvals or otherwise howsoever relating to or arising out of an Environmental Incident; or
|
(b) | any claim by any other person which relates to an Environmental Incident or to an alleged Environmental Incident; |
(a) | any release, discharge, disposal or emission of Environmentally Sensitive Material by or from a Relevant Ship; or |
(b) | any incident in which Environmentally Sensitive Material is released from a vessel other than a Relevant Ship and which involves a collision between a Relevant Ship and such other vessel or some other incident of navigation or operation, in either case, in connection with which a Relevant Ship is actually or potentially liable to be arrested, attached, detained or injuncted and/or a Relevant Ship and/or any owner and/or any other operator or manager thereof is at fault or otherwise liable to any legal or administrative action; or |
(c) | any other incident in which Environmentally Sensitive Material is released otherwise than from a Relevant Ship and in connection with which any Relevant Ship is actually or potentially liable to be arrested and/or where any |
(a) | 'The International Management Code for the Safe Operation of Ships and for Pollution Prevention', currently known or referred to as the 'ISM Code', adopted by the Assembly of the International Maritime Organisation by Resolution A.741(18) on 4 November 1993 and incorporated on 19 May 1994 into chapter IX of the International Convention for the Safety of Life at Sea 1974(SOLAS 1974); and |
(b) | all further resolutions, circulars, codes, guidelines, regulations and recommendations which are now or in the future issued by or on behalf of the International Maritime Organisation or any other entity with responsibility for implementing the ISM Code, including without limitation, the 'Guidelines on implementation or administering of the International Safety Management (ISM) Code by Administrations produced by the International Maritime Organisation pursuant to Resolution A. 788(19) adopted on 25 November 1995, |
(a) | the document of compliance (DOC) and safety management certificate (SMC) issued pursuant to the ISM Code within the periods specified by the ISM Code; and |
(b) | all other documents and data which are relevant to the ISM SMS and its implementation and verification which the Lender may require; and |
(c) | any other documents which are prepared or which are otherwise relevant to establish and maintain compliance of the Ship or the compliance of the Borrower and the Manager with the ISM Code which the Lender may require; |
(a) | the International Ship Security Certificate issued pursuant to the ISPS Code within the periods specified by the ISPS Code; and |
(b) | all other documents and data which are relevant to the ISPS Code and its implementation and verification which the Lender may require; |
(a) | the applicable Screen Rate; or |
(b) | (if no Screen Rate is available for any Interest Period) the arithmetic mean of the rates (rounded upwards to four decimal places) quoted to the Lender in the London interbank market, at 11.00 a.m. on the Interest Determination Date for that Interest Period for the offering of deposits in Dollars in an amount comparable to the Facility (or any relevant part of the Facility) and for a period comparable to the relevant Interest Period and, if any such rate is below zero, LIBOR will be deemed to be zero. |
(a) | its Original Jurisdiction; |
(b) | any jurisdiction where any asset subject to or intended to be subject to a Finance Document to be executed by it is situated; |
(c) | any jurisdiction where it conducts its business; and |
(d) | the jurisdiction whose laws govern the perfection of any of the Finance Documents entered by it; |
(a) | imposed by any law or regulation of the United Kingdom, the Council of the European Union, the United Nations or its Security Council or the United States of America, whether or not any Security Party or any other member of the Group is legally bound to comply with the forgoing; or |
(b) | otherwise imposed by any law or regulation by which any Security Party, or any other member of the Group, is bound or, as regards a regulation, compliance with which is reasonable in the ordinary course of business of any Security Party or any other member of the Group; |
(i) | if the Master Agreement is utilized and for as long as it is utilized, One hundred Twenty Five per cent (125%) of the aggregate amount of the Facility and the Maximum Permitted Swap Exposure at any relevant time; or |
(ii) | if the Master Agreement is not utilized, One hundred Thirty per cent (130%) of the Facility at any relevant time; |
(a) | the actual or constructive or compromised or arranged or agreed total loss of the Ship; or |
(b) | the Compulsory Acquisition of the Ship; or |
(c) | the hijacking, theft, condemnation, capture, seizure, arrest, detention or confiscation of the Ship (other than where the same amounts to the Compulsory Acquisition of the Ship) by any Government Entity or by persons acting or purporting to act on behalf of any Government Entity unless such Ship be released and restored to the Borrower from such hijacking, theft, condemnation, capture, seizure, arrest, detention or confiscation within thirty (30) days after the occurrence thereof or such lesser period provided in the War Risks Insurances; |
2.02 | In this Agreement clause headings are for ease of reference only and shall be disregarded in the construction of this Agreement. |
2.03 | In this Agreement unless the context otherwise requires: |
2.03.01 | words importing the singular number shall include the plural and vice versa; |
2.03.02 | any reference to a document or instrument is a reference to that document or instrument as the same may have been, or may from time to time be amended or supplemented; |
2.03.03 | the liquidation, winding-up or dissolution of a company or body corporate or the appointment of a receiver, administrative receiver, manager or administrator of or in relation to a company or corporation or any of its assets shall be construed so as to include any equivalent or analogous proceedings under the laws of the jurisdiction in which it is incorporated or any jurisdiction in which it carries on business or has assets or liabilities; |
2.03.04 | references to persons include any individual, partnership, firm, trust, body corporate, government, governmental body, authority, agency, unincorporated body of persons or association; |
2.03.05 | a reference to any enactment or 'statutory provision include any enactment or statutory provision which amends, extends, consolidates or replaces the same or which has been amended, extended, consolidated or replaced by the same and shall include any orders, regulations, codes of practice, instruments or other subordinated legislation made under the relevant enactment or statutory provision; and |
2.03.06 | " month " means a period beginning in one calendar month and ending in the next calendar month on the day numerically corresponding to the day of the calendar month on which it started, provided that (a) if the period started on the last Banking Day in a calendar month or if there is no such numerically corresponding day, it shall end on the last Banking Day in such next calendar month and (b) if such numerically corresponding day is not a Banking Day, the period shall end on the next following Banking Day in the same calendar month but if there is no such Banking Day it shall end on the preceding Banking Day and " months " and " monthly " shall be construed accordingly; and |
2.03.07 | the words " herein " , " hereto " and " hereunder " refer to this Agreement as a whole and not to the particular Clause or Schedule in which the words may be used. |
3 | THE FACILITY — AVAILABILITY |
3.01 | The Lender hereby agrees to make available to the Borrower, subject to the terms and the conditions hereof, the Facility in an amount equal to the lesser of: |
3.01.01 | In case the Ship is, on the Drawdown Date, under an Approved Charter: |
3.01.01.1 | Nineteen million Nine hundred Fifty thousand Dollars ($19,950,000) and |
3.01.01.2 | seventy per cent (70%) of the Construction Cost and |
3.01.01.3 | seventy per cent (70%) of the Market Value of the Ship on the Drawdown Date (determined pursuant to Clause 22.26) |
3.01.02 | In case the Ship is not, on the Drawdown Date, under an Approved Charter: |
3.01.02.1 | Eighteen million Five hundred Twenty Five thousand Dollars ($18,525,000) and |
3.01.02.2 | sixty five per cent (65%) of the Construction Cost and |
3.01.02.3 | sixty five per cent (65%) of the Market Value of the Ship on the Drawdown Date (determined pursuant to Clause 22.26) |
3.02 | The Borrower undertakes to apply the proceeds of the Facility for the purpose stated herein; the Lender shall be entitled (but not obliged) to monitor the application of such proceeds. |
3.03 | Subject as herein provided, the Facility is available to be drawn by the Borrower only during the Availability Period. The Facility or any part thereof which remains undrawn at the close of business in Athens on the expiration of the Availability Period shall be automatically cancelled. |
4 | HEDGING STRATEGY |
4.01 | The Borrower acknowledges the significance of addressing the interest rate risk inherent in this Agreement in cooperation with the Lender. Along these lines: |
4.01.01 | the Borrower undertakes to establish, together with the Lender, mechanisms to monitor the interest rate exposure and evaluate available hedge strategies; |
4.01.02 | the Borrower invites the Lender to provide on a regular basis hedging ideas and products; and |
4.01.03 | the Borrower undertakes that it may enter into a Designated Transaction so as to limit its exposure under this Agreement to interest rate fluctuations on terms and conditions mutually agreed between the Borrower and the Lender. |
4.02 | Any Designated Transaction shall be entered into on the basis of the Master Agreement and pursuant to the strategy set out herein and shall be concluded with the Lender. |
4.03 | No Designated Transaction may be entered into by the Borrower: |
4.03.01 | if there is a Material Adverse Effect in relation to any one or more of the Security Parties or any other member of the Group and/or if any other Event of Default or a Potential Event of Default occurs; |
4.03.02 | for a period longer than five (5) years, commencing from the Drawdown Date; |
4.03.03 | for an amount which, when aggregated with the amount of any other Designated Transaction entered by the Borrower will not, at any relevant time, exceed the amount of the Facility, as reducing from time to time thereafter pursuant to Clause 11.01 so that the notional principal amount of the continuing Designated Transactions does not (taking into account the scheduled amortisation) exceed at any relevant time the amount of the Facility as reducing from time to .time thereafter pursuant to Clause 11.01; |
4.03.04 | if the Lender determines that at the relevant time the Swap Exposure exceeds, or might exceed as a result thereof, the Maximum Permitted Swap Exposure; |
4.04 | Notwithstanding any provision of this Agreement and/or the Master Agreement to the contrary, if for any reason a Designated Transaction has been entered into but the Facility is not drawn under this Agreement then, subject to clause 4.05, the Lender shall be entitled but not obliged (and, where relevant, may do so without the consent of the Borrower where it would otherwise be required whether under the Master Agreement or otherwise) to amend, supplement, cancel, net out, terminate, liquidate, transfer or assign all or any part of the rights, benefits and obligations created by such Designated Transaction and/or the Master Agreement and/or to obtain or re-establish any hedge or related trading position in any manner and with any person the Lender in its absolute discretion may determine. |
4.05 | If a Designated Transaction has been entered into but the Facility is not drawn down under this Agreement and the Lender in its absolute discretion agrees, following a written request of the Borrower, that the Borrower may be permitted to maintain all or part of a Designated Transaction, the Borrower shall, within fifteen (15) days of being notified by the Lender of such requirement in writing, provide the Lender with, or procure the provision to the Lender of, such additional security as shall in the opinion of the Lender be adequate to secure the performance of such Designated Transaction, whichadditional security shall take such form and be constituted by such documentation, as the Lender in its absolute discretion may approve or require. |
4.06 | The Borrower shall on the first written demand of the Lender indemnify the Lender in respect of all losses, costs and expenses (including, but not limited to, legal costs and expenses) incurred or sustained by the Lender as a consequence of or in relation to the effecting of any matter or transactions referred to in Clauses 4.04 and 4.05. |
4.07 | Without prejudice to or limitation of the obligations of the Borrower under Clause 4.06, in the event that the Lender exercises any of its rights under Clauses 4.04 or 4.05 and such exercise results in all or part of a Designated Transaction being terminated such termination shall be treated under the Master Agreement in the same manner as if it were a Terminated Transaction (as defined in section 14 of the Master Agreement) effected by the Lender after an Event of Default (as so defined in that section 14) by the Borrower and, accordingly, the Lender shall be permitted to recover from the Borrower a payment for early termination calculated in accordance with the provisions of section 6(e)(i) of the Master Agreement. |
4.08 | In the event that the Lender fails to enter into a Designated Transaction with the Borrower, the Lender shall not be liable to the Borrower to enter into such Designated Transaction nor to compensate the Borrower for such failure. |
4.09 | The Borrower hereby undertakes to ensure that, throughout the Security Period any and all payments by the Lender to the Borrower under each Designated Transaction are paid to the Earnings Account. |
5 | NOTICE OF DRAWDOWN |
5.01 | Subject to: |
5.01.01 | the receipt by the Lender of the documents and satisfaction of the other conditions specified in Clauses 19.01 and 19.03 in form and substance satisfactory to the Lender and its legal advisers on or before the Drawdown Date; and |
5.01.02 | no Event of Default or a Potential Event of Default having occurred; and |
5.01.03 | the representations and warranties set out in Clause 17 (updated mutatis mutandis to the Drawdown Date) being true and/or correct; and |
5.01.04 | the receipt by the Lender of the Notice of Drawdown in the form set out in Schedule 1 hereto not later than 11.00 a.m. (London time) two (2) Banking Days prior to the Drawdown Date setting out, inter alia, the date of the proposed Drawdown, |
5.02 | The Notice of Drawdown shall be irrevocable and the Borrower shall be bound to borrow in accordance with such notice. |
5.03 | On the payment of the Facility the Borrower shall sign an Acknowledgement in the form set out in Schedule 2 hereto. |
5.04 | If the Borrower gives the Notice of Drawdown pursuant to Clause 5.01.04 and the Lender makes arrangements on the basis of such notice to acquire Dollars in the London Interbank Market to fund the Facility or any part thereof and the Borrower is not permitted or otherwise fails to borrow in accordance with such Notice of Drawdown (either on account of any condition precedent not being fulfilled or otherwise) the Borrower shall indemnify the Lender against any damages, losses or expenses which the Lender may incur (either directly or indirectly) as a consequence of the failure by the Borrower to borrow in accordance with such Notice of Drawdown. |
6 | INTEREST PERIODS |
6.01 | Subject as provided in Clause 6.02, the Interest Periods applicable to the Facility shall (subject to market availability) be periods of a duration of three (3) or six (6) or twelve (12) months (or such other periods as the Lender and the Borrower may agree) as selected by the Borrower by written notice to be received by the Lender not later than 11.00 a.m. (London time) on the relevant Nomination Date; |
6.02 | Notwithstanding the provisions of Clause 6.01: |
6.02.01 | the initial Interest Period in respect of the Facility shall commence on the Drawdown Date and shall end on the expiry date thereof and each subsequent Interest Period shall commence on the expiry of the preceding Interest Period in respect thereof; |
6.02.02 | if any Interest Period would otherwise end on a day which is not a Banking Day, that Interest Period shall be extended to the next succeeding day which is a Banking Day unless such next succeeding Banking Day falls in another calendar month in which event that Interest Period shall end upon the immediately preceding Banking Day; |
6.02.03 | if any Interest Period commences on the last Banking Day in a calendar month or if there is no numerically corresponding day in the month in which that Interest Period ends, that Interest Period shall end on the last Banking Day in that later month; |
6.02.04 | where any Repayment Date occurs other than at the end of an Interest Period there shall in respect of that part of the Facility equivalent to the amount of the Repayment Instalment falling due on such Repayment Date be a separate Interest Period expiring on such Repayment Date and the Interest Rate relating to such part shall be fixed separately; |
6.02.05 | no Interest Period shall extend beyond the final Repayment Date; |
6.02.06 | if the Borrower fails to select an Interest Period in accordance with the above, such Interest Period shall be of three (3) months duration or of such other duration as the Lender in its sole discretion may select; and |
6.02.07 | save as provided in Clause 6.02.04, the Borrower shall not select more than one Interest Periods at any one time. |
7 | INTEREST |
7.01 | Subject to the terms of this Agreement the Borrower shall pay to the Lender interest in respect of the Facility (or the relevant part thereof) accruing at the Interest Rate for each Interest Period relating thereto in arrears on the last day of each Interest Period; provided that if any Interest Period is of a duration longer than three (3) months, accrued interest in respect of the Facility (or the relevant part thereof) shall be paid every three (3) months during such Interest Period and on the last day of such Interest Period. |
7.02 | Interest shall be calculated on the basis of the actual number of days elapsed and a three hundred and sixty (360) day year. |
7.03 | The Lender will calculate and determine the Interest Rate applicable for the Facility, each determination being promptly notified by the Lender to the Borrower at the beginning of each Interest Period in respect thereof. The Lender's certificate as to the Interest Rate applicable shall be final and (except in the case of manifest error) binding on the Borrower and the other Security Parties. |
8 | DEFAULT INTEREST |
8.01 | In the event of a failure by the Borrower to pay any amount on the date on which such amount is due and payable pursuant to this Agreement and/or any one or more of the other Finance Documents (unless otherwise specifically provided in any Finance Document) and irrespective of any notice by the Lender or any other person to the Borrower in respect of such failure, the Borrower shall pay interest on such amount on demand from the date of such default up to the date of actual payment (as well after as before judgment) at the rate per annum which is the aggregate of (a) Two per cent (2%) and (b) the Applicable Margin and (c) the rate at which the Lender in accordance with its normal practice is offered deposits in Dollars in the London Interbank Market for such period as the Lender may select at or about 11.00 a.m. (London time) on the Banking Day immediately following that on which the Lender becomes aware of such failure and (d) any Mandatory Cost and, so long as such failure continues, such rate shall be recalculated on the same basis thereafter. |
8.02 | Any interest which shall have accrued under Clause 8.01 in respect of an unpaid amount shall be compounded with the overdue amount at the end of each Interest Period applicable to that overdue amount and shall be due and payable at the end of the period by reference to which it is calculated or such other date or dates as the Lender may specify by written notice to the Borrower. |
8.03 | Clauses 7.02 and 7.03 shall apply to the calculation and determination of interest on amounts in default. |
9 | SUBSTITUTE BASIS |
9.01 | If the Lender determines (which determination - in the absence of manifest error - shall be conclusive) that: |
9.01.01 | at 11.00 a.m. (London time) on any Interest Determination Date the Lender was not being offered by banks in the London Interbank Market deposits in Dollars in the required amount and for the required period; or |
9.01.02 | LIBOR would not adequately reflect the cost to the Lender of making, funding or maintaining the Facility or any part thereof for the duration of the next succeeding Interest Period; or |
9.01.03 | by reason of circumstances affecting the London Interbank Market such deposits are not available to the Lender in such market; or |
9.01.04 | adequate and reasonable means do not or will not exist for the Lender to ascertain the Interest Rate applicable to the next succeeding Interest Period; or |
9.01.05 | Dollars will or may not continue to be freely transferable; |
9.02 | If, however, any of the events described in Clause 9.01 occurs on any other Interest Determination Date relative to the Facility or any part thereof, then the duration of the relevant Interest Period(s) shall be up to one (1) month and during such Interest Period the Interest Rate applicable to the Facility or the relevant part thereof shall be the rate per annum determined by the Lender rounded upwards to the nearest whole multiple of one sixteenth per cent (1/16th%) to be the aggregate of the Applicable Margin, and any Mandatory Cost and the cost (expressed as a percentage rate per annum) to the Lender of funding the amount of the Facility during such Interest Period(s). |
9.03 | During such Interest Period(s) the Borrower and the Lender shall negotiate in good faith in order to agree an Interest Rate or Interest Rates and Interest Period or Interest Periods satisfactory to the Borrower and the Lender to be substituted for those which but for the occurrence of any such event as specified in this Clause would have applied. If the Borrower and the Lender are unable to agree on such an Interest Rate(s) and Interest Period(s) by the day which is two (2) Banking Days before the end of the Interest Period referred to above, the Borrower shall repay the Facility together with accrued interest thereon at the Interest Rate set out above, together with all other amounts due under this Agreement relative to the Facility, on the last day of such Interest Period. |
10 | PREPAYMENT |
10.01 | Unless an Event of Default has occurred (whereupon the provisions of Clause 12.01 shall apply), the Borrower shall be obliged to prepay the Indebtedness in full, if the Ship is sold (with the Lender's prior written consent) or becomes a Total Loss or is refinanced or in the case that the Mortgage on the Ship is discharged pursuant to sub Clause 10.02.03. |
10.02 | Any prepayment referred to in Clause 10.01 shall be effected on the following dates (as appropriate): |
10.02.01 | in the case of a sale, of the Ship, on or before the date on which such sale is completed by delivery of the Ship to her buyer; or |
10.02.02 | in the case of a Total Loss, on the earlier of (i) the date falling one hundred eighty (180) days after the date of occurrence of such Total Loss and (ii) the date of receipt by the Lender of the proceeds of insurance relating to such Total Loss; or |
10.02.03 | in the case the Mortgage on the Ship is discharged (other than in the circumstances referred to in paragraph 10.02.01 above and where the Borrower and the other Security Parties have discharged all their obligations, whether actual or contingent, under this Agreement and the other Finance Documents), on or before the date on which the Mortgage on the Ship is discharged. |
10.03 | For the purposes of Clause 10.02.02 a Total Loss shall be deemed to have occurred |
10.03.01 | in the case of an actual total loss of the Ship on the actual date and at the time the Ship was lost or if such date is not known, on the date on which the Ship was last reported; |
10.03.02 | in the case of a constructive total loss of the Ship upon the date and at the time notice of abandonment of the Ship is given to the Insurers of the Ship for the time being (provided a claim for such total loss is admitted by such Insurers) or, if such Insurers do not admit such a claim, or, in the event that such notice of abandonment is not given by the Borrower to the Insurers of the Ship, on the date and at a time on which the incident, which may result in the Ship, being subsequently determined to be a constructive total loss, has occurred; |
10.03.03 | in the case of a compromised or arranged total loss of the Ship, on the date upon which a binding agreement as to such compromised or arranged total loss has been entered into by the Insurers of the Ship; |
10.03.04 | in the case of Compulsory Acquisition of the Ship, on the date upon which the relevant requisition of title or other compulsory acquisition occurs; and |
10.03.05 | in the case of hijacking, theft, condemnation, capture, seizure, arrest, detention or confiscation of the Ship (other than where the same amounts to Compulsory Acquisition of the Ship by any Government Entity, or by persons purporting to act on |
10.04 | In case the Holding by the Approved Shareholders in the Guarantor falls below ten per cent (10%) without the prior written consent of the Lender, the Borrower shall be obliged to prepay the Indebtedness in full to the full satisfaction of the Lender, within thirty (30) Banking Days from the Lender's written notice to the Borrower to that effect. |
10.05 | On giving not less than fifteen (15) days' prior written notice to the Lender the Borrower may prepay all or any part of the Facility (but if in part the amount to be prepaid shall be equal to one Repayment Instalment or a multiple thereof) at the end of the then current Interest Period without any premium of penalty. The Borrower shall obtain any consent or approval from the relevant authorities that may be necessary to make any such prepayment of the Facility and if it fails to obtain and/or comply with the terms of such consent or approval and in consequence thereof the Lender has to repay the amount prepaid or the Lender incurs any penalty or loss then the Borrower shall indemnify the Lender forthwith against all amounts so repaid and/or against all such penalties and losses incurred. |
10.06 | Prepayments under Clause 10.05 shall be applied on a pro rata basis on the then outstanding relevant Repayment Instalments and the relevant Balloon Payment. |
10.07 | Save as otherwise herein expressly provided, any prepayment of the Facility made or deemed to be made under this Agreement shall, if made otherwise than at the end of an Interest Period relative to the amounts prepaid, be made together with accrued interest thereon and such additional amount (if any) as the Lender may certify as necessary to compensate the Lender for any Broken Funding Costs incurred or to be incurred by it as a result of such prepayment including any loss of the Applicable Margin up to the end of the then current Interest Period in respect of the whole amount of the Facility which is outstanding at the beginning of such Interest Period. |
10.08 | Any notice of prepayment given by the Borrower under this Agreement shall be irrevocable and the Borrower shall be bound to prepay in accordance with each such notice. |
10.09 | The Borrower may not prepay all or any part of the Facility except in accordance with the express terms of this Agreement. |
10.10 | On or prior to any prepayment of the Facility or any part thereof under this Clause 10 or any other provision of this Agreement, the Borrower shall wholly or partially reverse, offset, unwind or otherwise terminate one or more of the continuing Designated Transactions as applicable so that the notional principal amount of the continuing Designated Transactions thereafter remaining does not and will not in the future (taking into account the scheduled amortization) exceed the amount of the Facility as reducing from time to time thereafter pursuant to Clause 11.01. |
10.11 | Without prejudice to the foregoing, if less than the full amount of the Facility remains outstanding following a prepayment under this Agreement and the Lender in its absolute discretion agrees, following a written request of the Borrower, that the Borrower may be permitted to maintain all or part of a Designated Transaction in an amount not wholly matched with or linked to all or part of the Facility, the Borrower shall, within fifteen (15) days of being notified by the Lender of such requirement, provide the Lender with, or procure the provision to the Lender of, such additional security as shall in the opinion of the Lender be adequate to secure the performance of such Designated Transaction, which additional security shall take such form and be constituted by such documentation, as the Lender in its absolute discretion may approve or require. |
10.12 | Notwithstanding any provision of the Master Agreement to the contrary, in the case of a prepayment of all or part of the Facility (including, without limitation, following the occurrence of a Total Loss or upon a sale of the Ship or the discharge of a Mortgage in accordance. with Clause 10.01 Mandatory Prepayment), or under Clauses 10.04 (Mandatory Prepayment), 9 (Substitute Basis), 16 (Change of Circumstances) or 23 (Security Margin)) then, subject to Clause 10.11, the Lender shall be entitled but not obliged (and, where relevant, may do so without the consent of the Borrower, where it would otherwise be required whether under the Master Agreement or otherwise) to amend, supplement, cancel, net out, terminate, liquidate, transfer or assign all or any part of the rights, benefits and obligations created by any Designated Transaction and/or the Master Agreement and/or to obtain or re-establish any hedge or related trading position in any manner and with any person the Lender in its absolute discretion may determine and both the Lender's and the Borrower's continuing obligations under any Designated Transaction and/or the Master Agreement shall, unless agreed otherwise by the Lender, be calculated so far as the Lender considers it practicable by reference to the amended repayment schedule for the Facility taking into account the fact that less than the full amount of the Facility remains outstanding. |
10.13 | The Borrower shall on the first written demand of the Lender indemnify the Lender in respect of all losses, costs and expenses (including, but not limited to, legal costs and expenses) incurred or sustained by the Lender as a consequence of or in relation to the effecting of any matter or transactions referred to in Clauses 10.11 and 10.12. |
10.14 | Without prejudice to or limitation of the obligations of the Borrower under Clause 10.13, in the event that the Lender exercises any of its rights under Clauses 10.11 and 10.12 and such exercise results in all or part of a Designated Transaction being terminated such termination shall be treated under the Master Agreement in the same manner as if it were a Terminated Transaction (as defined in section 14 of the Master Agreement) effected by the Lender after an Event of Default (as so defined in that section 14) by the Borrower and, accordingly, the Lender shall be permitted to recover from the Borrower a payment for early termination calculated in accordance with the provisions of section 6(e)(i) of the Master Agreement. |
11 | REPAYMENT |
11.01 | The Borrower shall repay the Facility by: |
11.02 | Each Repayment Instalment and the Balloon Payment shall be paid in Dollars. |
11.03 | Any amounts repaid or prepaid under this Agreement may not be re-borrowed. |
11.04 | On or prior to any repayment of the Facility or any part thereof under this Clause 11, the Borrower shall wholly or partially reverse, offset, unwind or otherwise terminate one or more of the continuing Designated Transactions as applicable so that the notional principal amount of the continuing Designated Transactions thereafter remaining does not and will not in the future (taking into account the scheduled amortisation) exceed the amount of the Facility as reducing from time to time thereafter pursuant to Clause 11.01. |
11.05 | Without prejudice to the provisions of the foregoing Clause 11.04, Clauses 10.11, 10.12, 10.13 and 10.14 will also apply on the repayment of the Facility or any part thereof under this Clause 11. |
12 | APPLICATION |
12.01 | All Proceeds received by the Lender under or pursuant to any one or more of the Finance Documents and expressed to be applicable in accordance with the provisions of this Clause 12 shall be held by the Lender, to be applied in the following manner: |
12.01.01 | first, in or towards payment of all sums other than principal of or interest on the Facility which may be owing to the Lender under this Agreement and the other Finance Documents or any of them; |
12.01.02 | second, in or towards payment of any default interest and/or overdue principal payments payable to the Lender under the Finance Documents; |
12.01.03 | third, in or towards payment to the Lender of any interest owing in respect of the Facility or any part thereof; |
12.01.04 | fourth, in or towards payment to the Lender of principal owing in respect of the Facility; |
12.01.05 | fifth, in or towards payment to the Lender of any amount due to it in accordance with the provisions of Clause 15 (Tax Gross up and Indemnities) and Clause 29 (Indemnity) by reason of any such payment in respect of the Facility not being effected on the last day of an Interest Period in respect of the total amount of the Facility; |
12.01.06 | sixth, in or towards payment of any amounts then payable to the Lender under the Master Agreement and the other Finance Documents including without limitation any net amount which the Borrower shall have become liable to pay or deliver under section 2 (Obligations) of the Master Agreement but shall have failed to pay or deliver |
12.01.07 | seventh at any time on or after the occurrence of an Event of Default in retention of a sum equal to the total of any and all other amounts (as calculated by the Lender) which although not then due to the Lender under any one or more of this Agreement and the other Finance Documents will become so due to the Lender, such sums thereafter to be applied by the Lender from time to time in accordance with this Clause 12; and |
12.01.08 | eighth, the surplus (if any) shall be paid to the Borrower or to whomsoever else may be entitled to receive such surplus. |
12.02 | If any Proceeds recovered by the Lender have to be repaid by the Lender on the ground of unfair or fraudulent preference or on any other ground, the Lender shall have the same rights hereunder and/or under the other Finance Documents against the Borrower as if such amounts had never been applied in payment of the Indebtedness. |
13 | EVIDENCE OF DEBT |
13.01 | The Lender shall maintain in accordance with its usual practice one or more Loan Accounts in the name of the Borrower evidencing the Indebtedness. |
13.02 | In any legal action or proceedings arising out of or in connection with this Agreement and/or the other Finance Documents the entries made in the Loan Account(s) maintained pursuant to Clause 13.01 or a certificate signed by one authorized officer of the Lender shall be conclusive evidence (save in the case of manifest error) of the existence and amounts of the liabilities of the Borrower therein recorded. |
14 | PAYMENTS |
14.01 | All amounts payable under this Agreement and/or the other Finance Documents by the Borrower, including amounts payable under this Clause 14, shall be paid in full to the Lender without set-off or counterclaim or retention and free and clear of and without any deduction or withholding for or on account of any Taxes. |
14.02 | In the event the Borrower is required by law to make any such deduction or withholding from any payment hereunder then the Borrower shall, within a period of not more than seven (7) Banking Days therefrom, pay to the Lender such additional amount as will result in the receipt by the Lender of the full amount which would have been received hereunder had no such deduction or withholding been made, but if the Lender shall be or becomes entitled to any Tax credit or relief in respect of any Tax which is deducted from any payment by the Borrower and if the Lender in its reasonable determination actually receives a benefit from such Tax credit or relief in its country of domicile, incorporation or residence, the Lender shall, subject to any laws or regulations applicable thereto, pay to the Borrower after such benefit is effectively received by the Lender such amounts (which shall be conclusively certified- in the absence of manifest |
14.03 | then the Indebtedness shall be repayable by the Borrower to the Lender on demand. |
14.04 | All payments to be made by the Borrower under this Agreement and/or the other Finance Documents shall be made in Dollars in immediately available and freely transferable and convertible funds not later than 11.00 a.m. London time on the date upon which the relevant payment is due to the Lender at such account as the Lender may from time to time nominate by written notice to the Borrower |
14.05 | The Borrower undertakes to indemnify the Lender against any loss incurred by the Lender as a result of any judgment or order being given or made for the payment of any amount due under this Agreement and/or the other Finance Documents and such judgment or order being expressed in a currency other than the currency in which the payment was due under this Agreement and/or the other Finance Documents and as a result of any variation having occurred in rates of exchange between the date on which the currency is converted for the purpose of such judgment or order and the date of actual payment thereof. This indemnity shall constitute a separate and independent liability of the Borrower and shall continue in force and effect notwithstanding any such judgment or order as aforesaid. |
15 | TAX GROSS UP AND INDEMNITIES |
15.01 | For the purposes of this Clause the following terms will have the meaning ascribed to them herein: |
15.02 | The Borrower shall (and shall procure that each other Security Party shall) make all payments to be made by them without any Tax Deduction, unless a Tax Deduction is required by law, subject as follows: |
15.02.01 | the Borrower shall, promptly upon becoming aware, that the Borrower or any other Security Party must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Lender accordingly. |
15.02.02 | if a Tax Deduction is required by law to be made by the Borrower or any other Security Party, the amount of the payment due from the Borrower or that other Security Party shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required; |
15.02.03 | if the Borrower or any other Security Party is required to make a Tax Deduction, the Borrower shall (and shall procure that such other Security Party shall) make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law; |
15.02.04 | within 30 days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Borrower shall (and shall procure that such other Security Party shall) deliver to the Lender a statement under section 975 of the ITA or other evidence reasonably satisfactory to the Lender that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority; |
15.03 | Tax indemnity |
15.03.01 | The Borrower shall (within three (3) Banking Days of the written demand by the Lender) pay to the Lender, if the Lender is a Protected Party, an amount equal to the loss, liability or cost which the Lender determines will be or has been (directly or indirectly) suffered for or on account of Tax by the Lender in respect of a Finance Document. |
15.03.02 | Clause 15.03.01 shall not apply: |
15.04 | Tax Credit |
15.04.01 | If a Security Party makes a Tax Payment and the Lender determines that: |
15.04.01.1 | a Tax Credit is attributable to an increased payment of which that Tax Payment forms part, to that Tax Payment or to a Tax Deduction in consequence of which that Tax Payment was received; and |
15.04.01.2 | the Lender has obtained, utilised and retained that Tax Credit, |
15.05 | VAT |
15.05.01 | All amounts expressed to be payable under a Finance Document by any Security Party to the Lender which (in whole or in part) constitute the consideration for any supply for VAT purposes are deemed to be exclusive of any VAT which is chargeable on that supply, and accordingly, if VAT is or becomes chargeable on any supply made by the Lender to any Security Party under a Finance Document and the Lender is required to account to the relevant tax authority for the VAT, that Security Party must pay to the Lender (in addition to and at the same time as paying any other consideration for such supply) an amount equal to the amount of the VAT (and the Lender must promptly provide an appropriate VAT invoice to the Borrower). |
15.05.02 | Where a Finance Document requires any Security Party to reimburse or indemnify the Lender for any cost or expense, that Security Party shall reimburse or indemnify (as the case may be) the Lender for the full amount of such cost or expense, including such part thereof as represents VAT, save to the extent that the Lender reasonably determines that it is entitled to credit or repayment in respect of such VAT from the relevant tax authority. |
15.05.03 | Any reference in this Clause 15.05 to any Security Party shall, at any time when such Security Party is treated as a member of a group for VAT purposes, include (where appropriate and unless the context otherwise requires) a reference to the representative member of such group at such time (the term " representative member " to have the same meaning as in the Value Added Tax Act 1994). |
15.05.04 | In relation to any supply made by the Lender to any Security Party under a Finance Document, if reasonably requested by the Lender, that Security Party must promptly provide the Lender with details of that Security Party's VAT registration and such other information as is reasonably requested in connection with the Lender's VAT reporting requirements in relation to such supply. |
15.06 | FATCA information |
15.06.01 | Subject to Clause 15.06.03, each Party shall, within ten Banking Days of a reasonable request by another Party: |
15.06.02 | If a Party confirms to another Party pursuant to Clause 15.06.01 (a)(i) that it is a FATCA Exempt Party and it subsequently becomes aware that it is not, or has ceased to be a FATCA Exempt Party, that Party shall notify that other Party reasonably promptly. |
15.06.03 | Clause 15.06.01 shall not oblige the Lender to do anything which would or might in its reasonable opinion constitute a breach of: |
15.06.04 | If a Party fails to confirm its status or to supply forms, documentation or other information requested in accordance with Clause 15.06.01 (including, for the avoidance of doubt, where Clause 15.06.03 applies), then: |
15.06.04.1 | if that Party failed to confirm whether it is (and/or remains) a FATCA Exempt Party then such Party shall be treated for the purposes of the Finance Documents as if it is not a FATCA Exempt Party; and |
15.06.04.2 | if that Party failed to confirm its applicable "passthru payment percentage" then such Party shall be treated for the purposes of the Finance Documents (and payments made thereunder) as if its applicable "passthru payment percentage" is 100%, |
15.07 | FATCA Deduction and gross-up by a Security Party |
15.07.01 | If a Security Party is required to make a FATCA Deduction, that Security Party shall make that FATCA Deduction and any payment required in connection with that FATCA Deduction within the time allowed and in the minimum amount required by FATCA. |
15.07.02 | If a FATCA Deduction is required to be made by a Security Party, the amount of the payment due from that Security Party shall be increased to an amount which (after making any FATCA Deduction) leaves an amount equal to the payment which would have been due if no FATCA Deduction had been required. |
15.07.03 | The Borrower shall promptly upon becoming aware that a Security Party must make a FATCA Deduction (or that there is any change in the rate or the basis of a FATCA Deduction) notify the Lender accordingly. Similarly, the Lender shall notify the Borrower and that Security Party in writing. |
15.07.04 | Within 30 days of making either a FATCA Deduction or any payment required in connection with that FATCA Deduction, the Security Party making that FATCA Deduction or payment shall deliver to the Lender evidence reasonably satisfactory to the Lender that the FATCA Deduction has been made or (as applicable) any appropriate payment paid to the relevant governmental or taxation authority. |
15.08 | FATCA Deduction by the Lender |
15.08.01 | The Lender may make any FATCA Deduction it is required by FATCA to make, and any payment required in connection with that FATCA Deduction, and the Lender shall not be required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction. The Lender shall notify the Borrower accordingly. |
15.08.02 | The Borrower shall (within three Banking Days of demand by the Lender) pay to the Lender an amount equal to the loss, liability or cost which the Lender determines will be or has been (directly or indirectly) suffered by the Lender as a result of making a FATCA Deduction in respect of a payment due to it under a Finance Document. |
15.08.03 | The Lender making, or intending to make, a claim under paragraph 15.08.02 above shall promptly notify in writing the Borrower of the FATCA Deduction. |
16 | CHANGE OF CIRCUMSTANCES |
16.01 | If: |
16.01.01 | any law, regulation, treaty or official directive (whether or not having the force of law) or the interpretation thereof by any authority charged with the administration thereof: |
16.01.01.1 | subjects the Lender to any Tax with respect to payments of principal of or interest on the Facility or any other amount payable hereunder; or |
16.01.01.2 | changes the basis of Taxation of payments to the Lender of principal of or interest on the Facility or of any other amount payable hereunder (other than a change in the rate of Tax on the overall net income of the Lender); or |
16.01.01.3 | imposes, modifies or deems applicable any reserve and/or special deposit requirements against or in respect of assets or liabilities of, or deposits with or for the account of, or loans or credit extended by the Lender; or |
16.01.01.4 | imposes on the Lender any other condition affecting this Agreement, the Facility or its funding; or |
16.01.02 | the Lender complies with any request, law, regulation (including any which relates to capital adequacy or liquidity control or which affects the manner in which the Lender allocates capital resources to its obligations under this Agreement [including without limitation, those resulting from (a) the implementation or application of or compliance with the "Basel III : International framework for liquidity risk measurement, standards and monitoring" and "Guidance for national authorities operating the countercyclical capital buffer" published by the Basel Committee on Banking Supervision in December 2010, as amended, supplemented or restated, and (b) the rules for global systemically important banks contained in "Global systemically important banks: assessment methodology and the additional loss absorbency requirement -Rules text" published by the Basel Committee on Banking Supervision in November 2011 and (c) any further guidance or standards published by the Basel Committee on Banking Supervision relating to "Basel III"] or directive from any applicable fiscal or monetary authority (whether or not having the force of law) and as a result of any of the foregoing either directly or indirectly; |
16.01.03 | the cost to the Lender of making, funding or maintaining the Facility is increased; or |
16.01.04 | the amount of principal, interest or other amount payable to the Lender or the effective return to the Lender hereunder is reduced; or |
16.01.05 | the Lender makes any payment or foregoes any interest or other return on or calculated by reference to the gross amount receivable by it from the Borrower hereunder, |
16.02 | Notwithstanding anything to the contrary herein contained, if any change in law, regulation or treaty or in the interpretation or application thereof by any authority charged with the administration thereof shall make it unlawful for the Lender to make, fund or maintain the Facility or any part thereof, the Lender may by written notice thereof to the Borrower declare that the Lender's duty to provide the Borrower with the Facility shall be terminated forthwith whereupon the Borrower shall prepay forthwith (or if permitted by law on the next following Interest Payment Date) the Facility together with all interest accrued thereon and all other amounts payable to the Lender hereunder including any Broken Funding Costs. The Lender's duties and liabilities hereunder shall be cancelled on the giving of such notice. |
16.03 | If any of the events referred to in Clause 16.01 or Clause 16.02 shall occur, but without prejudice to the liability of the Borrower to prepay the Facility, the Borrower and the Lender shall negotiate in good faith with a view to agreeing terms for making the Facility available from another jurisdiction, or funding the Facility from alternative sources or otherwise restructuring the Facility on a basis which is not unlawful. |
17 | REPRESENTATIONS AND WARRANTIES |
17.01 | The Borrower hereby represents and warrants to the Lender that the following matters are true at the time of this Agreement and warrant that they shall remain true until full payment of all amounts payable hereunder: |
17.01.01 | each Corporate Security Party is a company or corporation duly formed and validly existing under the laws of the country of its Original Jurisdiction and has the power and authority to own its respective assets and carry on business in each Relevant Jurisdiction and complies with all relevant legislation and laws and regulations (including but not limited to the laws and regulations relating to the listing of the |
17.01.02 | the Borrower has the power to borrow hereunder and to enter into Designated Transactions and each Security Party has power to enter into this Agreement and the other Subject Documents to which it is a party and to perform and discharge its respective duties and liabilities hereunder and thereunder and each Security Party has taken all necessary action (whether corporate or otherwise) required to authorise the execution, delivery and performance of this Agreement and the other Subject Documents to which is a party and the borrowing to be made hereunder; |
17.01.03 | the execution, delivery and performance of this Agreement and the other Subject Documents will not contravene or exceed the powers granted to each Security Party or by, or any provision of, any law or regulation (including but not limited to the laws and regulations relating to the listing of the shares of the Guarantor in NASDAQ, as the case may be), in any Relevant Jurisdiction of the Security Parties or any of them, any order or decree of any competent governmental agency or court of or in any Relevant Jurisdiction of the Security Parties or any of them, the certificates of incorporation, memoranda and articles of association of the Corporate Security Parties or any of them or any mortgage, deed, contract or agreement to which the Security Parties or any of them is/are a party and which is binding upon the Security Parties' assets and will not cause any Encumbrance (other than Permitted Liens) to arise over or attach to all or any part of any Security Party's revenues or assets nor require any Security Party to create any such Encumbrance otherwise than in favour of the Lender; |
17.01.04 | all consents, licences, approvals, registrations, authorisations or declarations (including, without limitation, all foreign exchange control approvals) in any Relevant Jurisdiction of the Security Parties or any of them required to enable the Borrower to borrow hereunder and the Borrower and each of the other Security Parties lawfully to enter into and perform and discharge their respective duties and liabilities under this Agreement and the other Subject Documents, to which each is a party and to ensure that the duties and liabilities of each of the Security Parties hereunder and thereunder are legal, valid and enforceable in accordance with the terms of this Agreement and the other Subject Documents to which each is a party and to make this Agreement and the other Subject Documents admissible in evidence in such aforesaid jurisdictions have been obtained or made and are in full force and effect; |
17.01.05 | this Agreement and the other Subject Documents constitute the legal, valid, binding and unconditional duties and liabilities of each Security Party as is a party thereto, enforceable against such Security Party in accordance with the terms thereof; |
17.01.06 | no Security Party has failed to pay when due any amount or to perform any duty under the provisions of any agreement to which it is a party or by which it may be bound relating to Financial Indebtedness in excess in aggregate of One million Dollars ($1,000,000) and no event has occurred and is continuing which constitutes, |
17.01.07 | no litigation, arbitration, tax claim or administrative proceedings in any court, arbitration tribunal or governmental authority are pending or, to the knowledge of the Borrower, threatened against any Security Party or any of its respective assets which might materially adversely affect such Security Party's ability to perform and discharge its respective duties and liabilities hereunder and under the other Subject Documents to which it is a party thereto; |
17.01.08 | the financial condition of the Security Parties has not suffered any material deterioration since that condition was last disclosed to the Lender; |
17.01.09 | the information provided to the Lender in relation to this transaction is true and correct in all material respects and does not omit any material detail; |
17.01.10 | except for the registration of the Mortgage at the appropriate Registry of ships, it is not necessary or advisable to ensure the legality, validity, enforceability or admissibility in evidence of this Agreement or of any one or more of the other Subject Documents, that any of them be filed, recorded or enrolled with any governmental authority or agency or that they be stamped with any stamp, registration or similar transaction tax in the United States or in the United Kingdom or in the Republic of the Marshall Islands or in the Republic of Liberia or in the Republic of Greece or in' any other Relevant Jurisdiction; |
17.01.11 | the Accounting Information provided by the Borrower and/or the Guarantor to the Lender is complete and correct and presents fairly the position of the members of the Group therein stated and the results of the operations of the members of the Group therein stated ended on the relevant date, and have been prepared in accordance with the Applicable Accounting Principles and practices consistently applied and give a true and fair view of the financial condition, assets and liabilities of the members of the Group therein stated at the date to which such Accounting Information have been prepared and since that date there has been no adverse change in the financial condition of the business, assets or operation of the members of the Group therein stated or the Group taken as a whole (as the case may be); |
17.01.12 | all the obligations and liabilities of the Borrower hereunder and of the other Security Parties under the other Subject Documents rank and will rank at least pari passu in right of payments with all other unsubordinated indebtedness of the Borrower or of the other Security Parties; |
17.01.13 | no Security Party is entitled to claim any immunity in relation to itself or its assets under any law or in any jurisdiction in connection with any legal proceedings, set off or counterclaim relating to this Agreement and the other Subject Documents to which it is a party or in connection with the enforcement of any judgment or order arising from such proceedings; |
17.01.14 | the Borrower has not incurred any Financial Indebtedness, or authorised or accepted any capital commitments (other than that normally associated with the construction of or the day-to-day operation of the Ship, where appropriate); |
17.01.15 | no Taxes are imposed by deduction withholding or otherwise on any payment made or to be made by any Security Party under this Agreement and/or any other of the Subject Documents or are imposed on or by virtue of the execution or delivery of this Agreement and/or any other of the Subject Documents or any document or instrument to be executed or delivered hereunder or thereunder and all relevant tax returns have been filed and/or will be filed when due; |
17.01.16 | None of the Security Parties is a FATCA FFI or a US Tax Obligor; |
17.01.17 | None of the Security Parties is materially overdue in the filing of any Tax returns or is overdue in the payment of any amount in respect of Tax. |
17.01.18 | No claims or investigations are being, or are reasonably likely to be, made or conducted against any of the Security Parties with respect to Taxes. |
17.01.19 | Each of the Security Parties (other than the Manager) is resident for Tax purposes only in its Original Jurisdiction and the Manager is resident for Tax purposes only in the Republic of Greece. |
17.01.20 | Each of the Security Parties and each member of the Group has conducted its businesses in compliance with applicable anti-corruption laws and has instituted and maintained policies and procedures designed to promote and achieve compliance with such laws. |
17.01.21 | It is not necessary under the laws of any Relevant Jurisdiction of any of the Security Parties (i) in order to enable the Lender to enforce its rights under any Finance Document; or (ii) by reason of the execution of any Finance Document or the performance by it of its obligations under any Finance Document, that the Lender should be licensed, qualified or otherwise entitled to carry on business in any of the Relevant Jurisdictions of any of the Security Parties and the Lender is not and will not be deemed to be resident, domiciled or carrying on business in any of the Relevant Jurisdictions of any of the Security Parties by reason only of the execution, performance and/or enforcement of any Finance Document. |
17.01.22 | Any borrowing by the Borrower under this Agreement, and the performance of its obligations under this Agreement and under the other Finance Documents, will be for the Borrower's own account and will not involve any breach by it of any law or regulatory measure relating to "money laundering" as defined in Article 1 of the Directive (2005/EC/60) of the European Parliament and of the Council of the European Communities. |
17.01.23 |
the choice of law agreed to govern this Agreement and each other Subject Document and the submission to the jurisdiction of the courts agreed in each of the Subject Documents are or will be on execution of the respective Subject Documents
|
17.01.24 | the giving of the Guarantee pursuant to this Agreement by the Guarantor is to the commercial benefit of the Guarantor; |
17.01.25 | each Security Party and each member of the Group is in compliance, in all respects, with all Sanctions; |
17.01.26 | none of the Security Parties and/or the other members of the Group is a Prohibited Person or is owned or controlled by, or acting directly or indirectly on behalf of or for the benefit of, a Prohibited Person and it does not own or control a Prohibited Person; and |
17.01.27 | no proceeds of the Facility shall be made available, directly or indirectly, to or for the benefit of a Prohibited Person or otherwise shall be, directly or indirectly, applied in a manner or for a purpose prohibited by Sanctions. |
17.02 | The Borrower hereby further represents and warrants to the Lender that on the Delivery Date the following matters will be true and shall remain true in all material respects throughout the Security Period: |
17.02.01 | the Ship has unconditionally been delivered to and accepted by the Borrower pursuant to the Purchase Documents and the full amount of the Construction Cost payable in respect thereof has been duly paid; |
17.02.02 | the Ship is duly registered in the name of the Borrower under a flag acceptable to the Lender; |
17.02.03 | the Ship is and will remain in the absolute and unencumbered ownership of the Borrower, save as contemplated by this Agreement and the other Finance Documents; |
17.02.04 | the Ship has and will maintain the highest class with the Classification Society free of all recommendations and qualifications of her Classification Society affecting class; |
17.02.05 | the Ship is and will remain operationally seaworthy; |
17.02.06 | the Mortgage in respect of the Ship has been duly recorded against the Ship as a valid first priority ship mortgage in favour of the Lender in accordance with the laws of her flag; |
17.02.07 | the Ship, the Borrower and the Manager will comply with all relevant laws, regulations and requirements (statutory or otherwise) including without limitation all Sanctions, and the ISM Code, the ISPS Code, the ISM Code Documentation and the ISPS Code Documentation as are applicable to (i) ships registered under the laws of the flag the Ship is flying and (ii) engaged in the same or a similar service as the Ship is engaged; |
17.02.08 | the Ship is and will remain under the management of the Manager under the terms of the Management Agreement; |
17.02.09 | the Ship is and will remain insured in accordance with the provisions of this Agreement in respect of the Insurances; |
17.02.10 | the Borrower and the Manager comply with the provisions of all Environmental Laws in respect of the Ship; |
17.02.11 | the Borrower and the Manager have obtained all Environmental Approvals and are and shall be in compliance with all such Environmental Approvals in respect of the Ship; |
17.02.12 | neither the Borrower nor the Manager have received notice of any Environmental Claim that alleges that the Borrower or the Manager is not in compliance with any Environmental Law or any Environmental Approval in respect of the Ship; |
17.02.13 | there is no Environmental Claim pending against the Borrower and/or the Manager and/or the Ship; |
17.02.14 | no Environmental Incident has occurred which could or might give rise to any Environmental Claim against the Borrower and/or the Manager and/or the Ship; |
17.02.15 | there are and will be no commissions, rebates, premiums or other payments by or to or on account of the Borrower, the other Security Parties and the shareholders of the Corporate Security Parties in connection with the Purchase Documents relating to the Ship other than as disclosed to the Lender by the Borrower in writing; |
17.02.16 | none of the parties to the Purchase Documents is in default thereunder; |
17.02.17 | the balance of the Construction Cost of the Ship (in addition to the part thereof to be financed with the proceeds of the Facility) has not been or, will not be provided by way of any loan from any party; |
17.03 | The Borrower further represents, warrants and confirms to the Lender that: |
17.03.01 | it enters into this Agreement for its own account and receives the Facility or any part thereof for its sole benefit; and |
17.03.02 | it will promptly inform the Lender (by written notice to the Lender) if it is not, or ceases to be, such beneficiary(ies) and will then set down in writing the name(s) and the address(es) of the relevant beneficiary(ies). |
17.04 | The representations and warranties of the Borrower set out in Clauses 17.01 and 17.02 and 17.03 above shall survive the execution of this Agreement and shall be deemed to be repeated on the Drawdown Date and on each Repayment Date, and on each Interest Payment Date and on the date of entering into each Designated Transaction with respect to the facts and circumstances existing at each such time as if made at such time. |
18 | SECURITIES |
18.01 | The Borrower hereby agrees that the Security Documents shall secure with first priority the due payment of the Indebtedness. |
18.02 | It is declared and agreed in relation to the security created by the Security Documents that: |
18.02.01 | it shall be held by the Lender as a continuing security for the payment of the Indebtedness; and |
18.02.02 | the security so created shall not be satisfied or discharged by intermediate payment or satisfaction of any part of the amount secured thereunder; and |
18.02.03 | the security so created shall be in addition to and shall not in any way be prejudiced or affected by any collateral or other security now or hereafter held by the Lender for all or any part of the amounts thereby secured; and |
18.02.04 | every power and right given to the Lender hereunder and under the Master Agreement shall be in addition to and not in limitation of any and every other power or right of the Lender under the Security Documents and may be exercised from time to time in such order and as often as the Lender may consider appropriate. |
19 | CONDITIONS PRECEDENT AND SUBSEQUENT |
19.01 | Notwithstanding the provisions of Clause 5, the agreement of the Lender to permit the drawdown of the Facility and/or the entering into any Designated Transaction is subject to the condition that the Lender shall have received not later than the Drawdown Date the following documents or evidence in form and substance satisfactory to the Lender and its legal advisers: |
19.01.01 | a copy, certified as a true copy by the secretary of each Corporate Security Party of the resolutions of the shareholders of the Borrower and resolutions of the directors of each of the Borrower, the Guarantor and the Manager, authorising the transaction contemplated hereby, resolving the issuance of each respective power of attorney to be provided under Clause 19.01.02 and authorising a person or persons to sign or executeon their behalf this Agreement, the Notice of Drawdown, the Acknowledgement (as in the form of Schedule 2 hereof) and the other Finance Documents as each is a party thereto; |
19.01.02 | the originals of any power or powers of attorney granted pursuant to Clause 19.01.01; |
19.01.03 | certificates or other evidence satisfactory to the Lender, in its sole discretion of the existence and good standing of each Security Party; |
19.01.04 | certificate issued by the respective director or secretary of each Corporate Security Party specifying the Directors and Officers of each such Corporate Security |
19.01.05 | copies of the relevant constitutional documents of each Corporate Security Party, certified as true copies by the Borrower's legal counsel; |
19.01.06 | certified copies of all documents (with a certified translation if an original is not in English) evidencing any other necessary action (including but without limitation governmental approval, consents, licences, authorisations, validations or exemptions which the Lender or its legal advisers may require) by the Security Parties or any of them with respect to this Agreement and the other Finance Documents; |
19.01.07 | such documents or evidence relating to the ultimate beneficial ownership of the Borrower and any corporate shareholder(s) thereof in form and substance satisfactory to the Lender; |
19.01.08 | such documents or evidence relating to the verification of identity and knowledge of the Lender's customers and compliance to the full satisfaction of the Lender with all necessary "know your customer" and money laundering requirements (including but without limitation compliance to the full satisfaction of the Lender with any requirements in relation to the shares of the Borrower and the Manager and any corporate shareholder(s) thereof), as the Lender may in its absolute discretion require; |
19.01.09 | evidence that the Earnings Account has been duly opened by the Borrower, as appropriate and all mandate forms, signature cards and authorities have been duly delivered and that the Earnings Account is free of all liens or charges; |
19.01.10 | payment of the fees in accordance with Clause 26; |
19.01.11 | evidence that the Borrower have complied with its obligations under Clauses 20.37 and 20.38; |
19.01.12 | evidence that the Ship has been duly delivered to and accepted by the Borrower and that she is duly registered in the ownership of the Borrower at the relevant ships' Registry acceptable by the Lender, free of any Encumbrances otherwise than as contemplated herein; |
19.01.13 | (if required by the Lender) a charter free market valuation of the Ship on the basis specified in Clause 22.26; |
19.01.14 | evidence that the Ship is insured in accordance with the provisions of this Agreement; |
19.01.15 | evidence that the Ship is classed at the highest classification status with the Classification Society free of recommendations or other conditions or notations affecting her class; |
19.01.16 | certified copies of the classification and international safety and trading certificates issued by the Classification Society of the Ship and each other competent authority (as the case may be) free of recommendations or other conditions affecting her class; |
19.01.17 | copies of the ISM Code Documentation and the ISPS Code Documentation in relation to the Ship, the Borrower and the Manager; |
19.01.18 | the Mortgage on the Ship duly executed by the Borrower, legalised as appropriate and registered at the appropriate Shipping Registry; |
19.01.19 | the Master Agreement and the Master Agreement Assignment duly executed by the Borrower; |
19.01.20 | the General Assignment and Earnings Account Charge duly executed by the Borrower; |
19.01.21 | notices of assignment of the Insurances in respect of the Ship duly signed by the Borrower; |
19.01.22 | notices of assignment of the Earnings in respect of the Ship duly signed by the Borrower; |
19.01.23 | the Manager's Undertaking in respect of the Ship together with notices of assignment of the right, title and benefit of the Manager to the Insurances of the Ship, duly executed, as appropriate; |
19.01.24 | the Guarantee duly executed by the Guarantor; |
19.01.25 | (in case the Ship is under an Approved Charter) the Approved Charter Assignment duly executed by the Borrower together with the relevant notices thereof acknowledged by the relevant charterer(s); |
19.01.26 | copy of the Management Agreement, the Purchase Documents and the Approved Charter (if any), all certified as true and complete copies thereof by the Borrower's legal counsel; |
19.01.27 | the Manager's Undertaking in respect of the Ship duly executed by the Manager, and respective notices thereof; |
19.01.28 | evidence that an amount of Seven thousand Five hundred Euros (€7,500), plus disbursements and VAT thereon has been paid to the Messrs V&P Law Firm in connection with the preparation of this Agreement and the other Finance Documents, or irrevocable written mandates to the Lender to make those payments forthwith by debiting any account of the Borrower held with the Lender; |
19.01.29 | such further documents and evidence as the Lender may hereafter request. |
19.02 | The agreement of the Lender to maintain the Facility or any part thereof and/or to enter into any Designated Transaction is subject to the condition that the Lender shall have |
19.02.01 | a letter from the agents referred to in Clauses 41.04 and 41.05 addressed to the Lender confirming acceptance of their appointment as agents for service of process; |
19.02.02 | the opinion letters from counsels appointed and/or acceptable to the Lender as well as opinion letters from the Security Parties' legal counsel in relation to this Agreement and the other Finance Documents in form and substance satisfactory to the Lender; and |
19.02.03 |
such further documents and evidence as the Lender may hereafter request.
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19.03 | The obligation of the Lender to advance the Facility or any part thereof is further subject to the following conditions: |
19.03.01
|
That both at the date of the Notice of Drawdown and on the Drawdown Date: |
19.03.02 |
That if the test set out in Clause 23 was applied immediately following the advance of the Facility, the Borrower would not be obliged to provide additional security or prepay part of the Facility as therein provided.
|
19.04 | If the Lender, at its discretion, permits the Facility or any part thereof to be borrowed before certain of the conditions referred to in Clause 19.01 as the case may be are satisfied, the Borrower shall ensure that those conditions are satisfied within five (5) Banking Days after the Drawdown Date (or such longer period as the Lender specifies). |
20 | GENERAL UNDERTAKINGS |
20.01 | to (and ensure and procure that each other Security Party shall) supply the Lender with such number of copies as the Lender may require of (a) the annual Accounting Information as soon as available but in any event not later than one hundred and fifty (150) days after the end of the relevant period to which they relate starting with the 2013 financial statements and (b) such other information with regard to the business, properties or condition, financial or otherwise, of the Guarantor, the Manager and the other members of the Group as the Lender may from time to time reasonably request; |
20.02 | to procure that the Accounting Information to be delivered from time to time in accordance with Clause 20.01 shall be prepared in accordance with the Applicable Accounting Principles and practices consistently applied, which shall present fairly the financial positions, as at the end of each such financial year to which they relate, of the Group and the results of its operations for the year to which the Accounting Information relates. |
20.03 | to (and ensure and procure that each other Security Party shall) obtain promptly at any time and from time to time such registrations, licenses, consents and approvals as may be required in respect of this Agreement and the other Subject Documents under any applicable law or regulation to enable them to perform and discharge their respective duties and liabilities hereunder and thereunder and promptly supply the Lender with copies thereof; |
20.04 | to (and ensure and procure that each other Security Party shall) ensure that at all times the claims of the Lender against the Borrower and the other Security Parties under this Agreement and the other Finance Documents rank at least pari passu with the claims of all other unsecured creditors of the relevant Security Party save those whose claims are preferred by any bankruptcy, insolvency or other similar laws of general application; |
20.05 | to (and ensure and procure that each other Security Party shall) deliver to the Lender translations into English (certified by an authorised translator) of any documents which have to be delivered to the Lender under the terms of this Agreement or the other Subject Documents, the originals of which are not in the English language; |
20.06 | not to make any loans or advances to, or any investments in, any person, firm, corporation or joint venture (or to any officer, director, stockholder, employee or customer of any such person) other than loans or advances made in the ordinary course of business; |
20.07 | not to (and ensure and procure that the Guarantor shall not) declare or pay any dividends or make any distributions to its respective shareholders in any form whatsoever if: |
20.07.01 | an Event of Default or a Potential Event of Default has occurred; or |
20.07.02 | immediately following such payment of dividends and/or distributions the test set out in Clause 23 was applied and the Borrower would be obliged to provide additional security or prepay part of the Facility as therein provided; or |
20.07.03 | immediately following such payment of dividends and/or distributions the Borrower would be in breach of Clause 20.38; |
20.08 | not to borrow any money or permit any such borrowing to continue or incur any Financial Indebtedness whatsoever other than the Facility and the Swap Exposure or other than by way of subordinated shareholders' loans or enter into any agreement for payment on deferred terms (otherwise than on customary suppliers' credit terms) or any equipment lease or contract hire agreement other than in the ordinary course of business; |
20.09 | not to assume, guarantee or otherwise undertake the liability of any person, firm or company (otherwise than pursuant to the terms hereof and in the ordinary course of construction, operation or trading of the Ship); |
20.10 | not to authorise or accept any capital commitments (save and except in connection with the ordinary course of construction, operation or trading of the Ship); |
20.11 | not to (and ensure and procure that each other Security Party shall not) change the nature of its respective business or commence any business other than the ownership and operation of ships and activities ancillary thereto; |
20.12 | not to (and ensure and procure that each other Security Party shall not) (save and except as provided in this Agreement or otherwise in favour of the Lender), create or permit to exist any Encumbrance whatsoever on the Ship or on any of its other property or assets, real or personal, whether now owned or hereafter acquired, other than a Permitted Lien; |
20.13 | without prejudice to the obligations of the Borrower under Clause 20.14, promptly after the happening of an event which is (or may, with the giving of notice or passage of time or satisfaction of any other condition or any combination of the foregoing, become) an Event of Default, to notify the Lender in writing of such event and of the steps (if any) which are being taken to nullify or mitigate its effect; |
20.14 | from time to time on request by the Lender to (and ensure and procure that each other Security Party shall) deliver to it a certificate signed by a director or officer of such Corporate Security Party confirming that, save as may be notified in detail in such certificate, no Event of Default or Potential Event of Default has occurred and is then subsisting, to be accompanied by such evidence as to the information and matters contained in such certificate as the Lender may from time to time reasonably require; |
20.15 | to (and procure that each other relevant Security Party shall) ensure and procure that each Corporate Security Party shall maintain its corporate existence under the laws of its Original Jurisdiction and shall comply in all material respects with all relevant legislation and laws and regulations (including but not limited to the laws and regulations relating to the listing of the shares of the Guarantor in NASDAQ), applicable to such Corporate Security Party; |
20.16 | to (and procure that each other relevant Security Party shall) ensure and procure that no change in |
20.17 | to execute and procure the execution by each other Security Party of any further document or documents reasonably required by the Lender in order to perfect or complete the security created by the Security Documents; |
20.18 | to (and ensure and procure that each other Security Party shall) pay all Taxes, assessments and other governmental charges when the same fall due, except to the extent that the same are being contested in good faith by appropriate proceedings and adequate reserves have been set aside for their payment if such proceedings fail and ensure and procure that all its relevant tax returns shall be properly and timely filed; |
20.19 | other than in accordance with this agreement, not to convey, assign, transfer, sell or otherwise dispose of or deal with the Ship or any of its real or personal property, assets or rights whether present or future, neither to assign or otherwise transfer its rights title and interest unto the Master Agreement; |
20.20 | to send (or procure that it is sent) to the Lender as soon as the same is instituted (or, to the knowledge of any Security Party threatened), details of any litigation, arbitration or administrative proceedings against or involving a Security Party, or the Ship which is likely to have a Material Adverse Effect on a Security Party or the operation of the Ship; |
20.21 | to comply (and ensure that each other Security Party will comply) with all laws regulations (including but not limited to the laws and regulations relating to the listing of the shares of the Guarantor in NASDAQ, as the case may be), treaties and conventions applicable to the Borrower, the other Security Parties and the Ship and to carry on the Ship all certificates and other documents which may from time to time be required to evidence such compliance; |
20.22 | not to (and ensure and procure that no Security Party will) become a FATCA FFI or a US Tax Obligor; |
20.23 | to (and ensure and procure that the Security Parties and the other members of the Group will) comply, in all respects, with all Sanctions; |
20.24 | not to (and ensure and procure that none of the Security Parties and the other members of the Group will) become a Prohibited Person or become owned or controlled by, or act directly or indirectly on behalf of, a Prohibited Person, or become the owner or controller of a Prohibited Person; |
20.25 | not to make, directly or indirectly, available any proceeds of the Facility to or for the benefit of a Prohibited Person and to ensure and procure that any proceeds of the |
20.26 | not to and ensure and procure that the Borrower and the Manager and any corporate shareholder(s) thereof shall not dissolve, merge into or consolidate with any other company or person and ensure and procure that no change in the management or the legal ownership of the Borrower and the Ship shall be effected; |
20.27 | to (and procure that the Guarantor will) ensure that no change in the Chief Executive Officer and/or the Chairman of the Guarantor shall occur; |
20.28 | to use the proceeds of the Facility for its benefit and under its full responsibility and exclusively for the purpose specified in this Agreement; |
20.29 | not to (and ensure and procure that no other Security Party will) directly or indirectly use the proceeds of the Facility for any purpose which would breach the Bribery Act 2010, the United States Foreign Corrupt Practices Act of 1977 or other similar legislation in other jurisdictions; |
20.30 | to (and ensure and procure that each of the Security Parties and each member of the Group will) conduct its businesses in compliance with applicable anti-corruption laws and has instituted and maintained policies and procedures designed to promote and achieve compliance with such laws; |
20.31 | to ensure and procure that, throughout the Security Period, all payments in relation to the operation of the Ship will be effected through the Lender (either via the Piraeus branch or any other branch reasonably nominated by the Lender); |
20.32 | to ensure and procure that the Swap Exposure shall not exceed the Maximum Permitted Swap Exposure; |
20.33 | to (and ensure and procure that each other Security Party will) deliver promptly to the Lender such documents and evidence as the Lender shall from time to time require relating to the ultimate beneficial ownership of the Borrower, the Manager and their respective corporate shareholder(s) (save from the Guarantor); |
20.34 | to (and ensure and procure that each other Security Party will) deliver to the Lender such documents and evidence as the Lender shall from time to time require relating to the verification of identity and knowledge of the Lender's customers and the compliance by the Lender with all necessary "know your customer" or similar checks, and to comply within thirty (30) days from the Lender's written notice to the Borrower to that effect, to the full satisfaction of the Lender, with any requirements of the Lender in relation to the shares of the Borrower and the other members of the Group and their respective corporate shareholder(s) [including but without limitation any requirements of the Lender as to the approved form of the shares (registered or otherwise) of the Borrower and the other members of the Group and their corporate shareholder(s)], always on the basis of applicable laws and regulations or the Lender's own internal (generally applied) |
20.35 | to (i) provide the Lender with any documentation or information, as the Lender may request, which relates to individual or entity tax status and (ii) inform the Lender, or respond to any request from the Lender, if there are any changes to tax information previously provided; |
20.36 | upon request by the Lender, to obtain, and to ensure and procure that each other Security Party will obtain a written waiver or consent from its respective Substantial Owners or Controlling Persons, which will be provided to the Lender to permit the Lender and other members of the HSBC Group to disclose and report tax and account specific financial information to any local or foreign Tax Authority. Where any one of the Borrower and/or the other Security Parties fails to comply with requests for tax information, or fails to respond to requests for waivers or consents for tax information disclosure, or fails to respond to requests to obtain waivers or consents from Substantial Owners or Controlling Persons, the Lender may take, and may instruct members of the HSBC Group to take whatever actions are necessary to comply with the Lender's local or foreign tax reporting obligations, including without limitation any of the following action: |
20.37 | to ensure and procure that at all times during the Security Period, the Borrower and/or the Guarantor shall maintain with the Piraeus branch of the Lender, or, subject to the prior written consent of the Lender, at any other branch of the Lender to the credit of any account held with the Lender in the name of the Borrower and/or the Guarantor, minimum deposits amounting in aggregate to at least Dollars Five hundred thousand ($500,000) (which amount for the avoidance of doubt shall include the amount required by Clause 20.38.03 hereof), free of any Encumbrances in relation to this Ship; |
20.38 | to (and procure that the Guarantor will) ensure that throughout the Security Period: |
20.38.01 | the Market Value Adjusted Net Worth of the Guarantor shall not be less than Fifteen million Dollars ($15,000,000); |
20.38.02 | the Leverage Ratio of the Guarantor will not be higher than 0.75:1; and |
20.38.03 | on a consolidated basis, at all times, the aggregate amount of cash deposits held in accounts of members of the Group (including the Guarantor) free from any Encumbrances shall not be less than Three hundred thousand Dollars ($300,000) per Fleet Vessel; |
21 | INSURANCE UNDERTAKINGS |
21.01 | to insure and keep insured the Ship in Dollars or such other currency as may be approved in writing by the Lender, in the full insurable value of the Ship but in no event for an amount less than the higher of (i) the Market Value of the Ship and (ii) one hundred and twenty five per cent (125%) of the aggregate of (a) the Facility and (b) (in case the Master Agreement is utilized) the Maximum Permitted Swap Exposure against fire and usual marine (including Excess Risks) and War Risks covered by hull and machinery policies; |
21.02 | to enter the Ship in the name of the Borrower, for her full value and tonnage in a protection and indemnity association approved by the Lender with unlimited liability if available otherwise for the highest possible standard cover for the time being $1,000,000,000 for oil pollution and for excess oil spillage and pollution liability insurance for the highest possible standard cover against all Protection and Indemnity Risks; |
21.03 | to pay to the Lender on demand all premiums or other amounts payable by the Lender in effecting a Mortgagees' Interest Insurance policy ("MII") and a mortgagee's interest (additional perils) insurance policy in the name of the Lender for a minimum insured amount of not less than one hundred and ten per cent (110%) of (a) the Facility and (b) (in case the Master Agreement is utilized) the Maximum Permitted Swap Exposure and under such wording and conditions acceptable to the Lender; |
21.04 | if the Ship enters the territorial waters of the United States of America (or other jurisdiction having legislation similar to the US Oil Pollution Act 1990) for any reason whatsoever, to take out such additional insurance to cover such risks as may be necessary in order to obtain a Certificate of Financial Responsibility from the United States Coastguard; |
21.05 | upon the Lender's request, to effect loss of hire and/or Earnings Insurance on the Ship (as may be required by the Lender) in respect of charterparties which exceed twelve (12) months duration and otherwise on such terms and in such amounts as the Lender may instruct the Borrower as being necessary or appropriate; |
21.06 | to effect such additional Insurances as may reasonably be requested by the Lender to maintain the scope of the existing cover of the Insurances; |
21.07 | to renew the Insurances at least fourteen (14) days before the relevant Insurances expire and to procure that the Approved Brokers shall promptly confirm in writing to the Lender as and when each such renewal is effected; |
21.08 | to punctually pay all premiums, calls, contributions or other sums payable in respect of the Insurances and to produce all relevant receipts when so required in writing by the Lender; |
21.09 | to arrange for the execution of such guarantees as may from time to time be required by any Protection and Indemnity or War Risks association; |
21.10 | to give notice of assignment of the Insurances to the Insurers in the form set out in Schedule 2 to the General Assignment and to procure that a copy of the notice of assignment shall be endorsed upon or attached to the relevant Insurance Documents; |
21.11 | to procure that the Insurance Documents shall be deposited with the Approved Brokers and that such brokers shall provide the Lender with certified copies thereof and shall issue to the Lender a letter or letters of undertaking in such form as the Lender shall reasonably require; |
21.12 | to procure that the Protection and Indemnity and/or War Risks associations in which the Ship is entered shall provide the Lender with a letter or letters of undertaking in their standard form and shall provide the Lender with a copy of the certificates of entry; |
21.13 | to procure that the Insurance Documents (including all certificates of entry in any Protection and Indemnity and/or War Risks association) shall contain loss payable clauses in the form set out in Schedule 3 or Schedule 4 (as may be appropriate) to the General Assignment; |
21.14 | to procure that the Insurance Documents shall provide that the lien or set off for unpaid premiums or calls shall be limited to only the premiums or calls due in relation to the Insurances on the Ship and for fourteen (14) days prior written notice to be given to the Lender by the Insurers (such notice to be given even if the Insurers have not received an appropriate enquiry from the Lender) in the event of cancellation or termination of Insurances and in the event of the non-payment of the premium or calls, the right to pay the said premium or calls within a reasonable time; |
21.15 | to promptly provide the Lender with full information regarding any Major Casualty or any casualties or damage to the Ship in consequence whereof such Ship has become or may become a Total Loss; |
21.16 | to promptly provide the Lender, at the Borrower's cost, with a detailed report issued by a firm of marine insurance brokers or consultants appointed by the Lender in relation to the Insurances, as and when the Lender may reasonably request; |
21.17 | not to do any act nor voluntarily suffer nor permit any act to be done whereby any Insurance shall or may be suspended or avoided and not to suffer nor permit the Ship to engage in any voyage nor to carry any cargo not permitted under the Insurances in |
21.18 | (without limitation to the generality of the foregoing) in particular not permit the Ship to enter or trade to any zone which is declared a war zone by any Government or by the Ship's War Risks Insurers unless there shall have been effected by the Borrower and at its expense such special insurance as the War Risk Insurers may require; and |
21.19 | to procure that all amounts payable under the Insurances are paid in accordance with the loss payable clause in the form set out in Schedule 3 or Schedule 4 (as may be appropriate) to the General Assignment and to apply and procure that all amounts as are paid to the Borrower are applied to the repair of the damage and the reparation of the loss in respect of which the said amounts shall have been received; and |
21.20 | should the Ship be laid up for any period, to arrange 'lay-up' Insurances for the Ship during such period, at its own cost and upon such terms and conditions, in such amounts and with such Insurers as shall from time to time be approved in writing by the Lender. |
22 | OPERATIONAL UNDERTAKINGS |
22.01 | to ensure that the Ship shall be kept registered as a Liberian flag ship at the port of Monrovia, Liberia, (or under such other flag as may be acceptable to the Lender in its reasonable discretion) and not to do or suffer to be done anything whereby such registration may be forfeited or imperilled; |
22.02 | to ensure that all the Earnings of the Ship are paid into the Earnings Account; |
22.03 | to pay as and when due and payable, all taxes, assessments, levies, governmental charges, fines and penalties lawfully imposed on and enforceable against the Ship; |
22.04 | to ensure that the Ship (or any share thereof or interest therein) shall not be sold transferred, mortgaged, charged, hypothecated or abandoned (save in the case of maritime necessity) and that neither the Insurances nor the Earnings of the Ship or any Requisition Compensation will be assigned otherwise than in favour of the Lender; |
22.05 | to ensure that the Ship shall neither be employed and/or operated in a manner contrary to any law or regulation in any relevant jurisdiction including without limitation to the ISM Code and the ISPS Code and all Sanctions and neither Borrower nor the Manager will engage in any unlawful trade or carry any cargo that may expose the Ship to penalty, forfeiture or capture and in the event of hostilities in any part of the world (whether a war be declared or not) nor employ the Ship or voluntarily suffer her employment in carrying any contraband goods; |
22.06 | not to create or permit to be created or continued any lien or Encumbrance(s) on the Ship and/or the Insurances and/or the Earnings and/or any Requisition Compensation (other than Permitted Liens) and to satisfy all claims and demands which if unpaid might in law or by statute or otherwise create a lien or Encumbrance(s) and (without prejudice to the generality of the foregoing) to procure that no lien or Encumbrance(s) is created or permitted to be created or continued on the Ship for any reason whatsoever; |
22.07 | on the request of the Lender, to provide to and procure that the Lender shall be provided with satisfactory evidence that the wages, allotments, insurance and pension contributions of the Master and crew of the Ship are being paid in accordance with the relevant agreements relating to the Ship and the relevant regulations, and that all deductions from the remuneration of the Master and crew in respect of any tax liability (including all social insurance contributions) are being made and accounted for to the relevant authority and that the Master of the Ship has no claim for disbursements other than those properly incurred by him in the ordinary trading of the Ship on the voyage then in progress; |
22.08 | if any writ or proceedings are issued against the Ship or if the Ship shall be otherwise attached, arrested or detained by any proceeding in any court or tribunal or by any government or other authority, the Borrower shall immediately notify and procure that the Lender shall be notified thereof by telefax confirmed by letter and to cause the Ship to be released and all liens or Encumbrance(s) (except for the Mortgage and any Permitted Liens on the Ship) thereon to be discharged forthwith; |
22.09 | (save for the Approved Charter) not to voyage or time charter the Ship or place her under any contract for employment for any period which when aggregated with any optional periods of extension contained in the said charter or contract, would exceed twelve (12) months duration, provided however that in the event of the Ship being employed (with the Lender's prior written consent) under any charter which when aggregated with any optional periods contained in such charter would exceed twelve (12) months duration, the Lender shall be furnished forthwith with (a) details and documentary evidence satisfactory to the Lender in its sole discretion in respect of the new employment, (b) upon Lender's request, a specific assignment in favour of the Lender of the benefit of such charter together with a notice of any such assignment addressed to the relevant charterer and endorsed with an acknowledgement of receipt by the relevant charterer all in form and substance satisfactory to the Lender and (c) upon Lender's request, a specific agreement of subordination of the rights of such charterer to the rights of the Lender; |
22.10 | not to demise charter the Ship for any period whatsoever; |
22.11 | not to deliver the Ship into the possession of any person or persons for effecting repairs or renewals to the Ship the cost of which will exceed the amount of Seven hundred thousand Dollars ($700,000) unless such person or persons shall have given a written undertaking to the Lender not to exercise any lien or right of detention on the Ship in respect of the cost of such repairs or renewals; |
22.12 | at all times and at the Borrower's own expense, to maintain the Ship in a seaworthy condition and in good running order and repair in accordance with first class ship ownership and ship management practice and to keep and procure that the Ship is kept in such condition as will entitle her to the highest classification status with the Classification Society free from recommendations and notations which have not been complied with in accordance with their terms and to procure that, upon the Lender's request, the Lender is provided with a certificate issued by the Classification Society that such classification status is maintained and with copies of all other classification certificates as the Lender may request in writing; |
22.13 | to submit the Ship regularly to such periodical or other surveys as may be required for classification purposes and, if so required by the Lender in writing, supply and procure that the Lender is supplied with copies of all survey reports issued in respect thereof; |
22.14 | to notify and procure that the Lender is notified immediately by facsimile of any recommendation or requirement imposed on the Ship by the Classification Society, the Insurers or by any other competent authority that is not complied with in accordance with its terms; |
22.15 | to give to the Lender reasonable prior notice of any proposed dry docking or any underwater survey of the Ship so that the Lender (if it so desires) can arrange for a representative to be present; |
22.16 | to authorise and procure that the Classification Society and all other regulatory authorities of the Ship are authorised to disclose to the Lender any information or documents requested by the Lender relating to the classification, repair, maintenance or seaworthiness of the Ship; |
22.17 | to comply with all legal requirements whether imposed by enactment, regulation, common law or otherwise and to have on board the Ship as and when legally required valid certificates showing compliance therewith; |
22.18 | without prejudice to Clause 22.17, to take all necessary and proper precautions to prevent any infringements of the Anti-Drug Abuse Act of 1986 of the United States of America or any similar legislation applicable to the Ship in any jurisdiction in or to which the Ship shall be employed or trade or which may otherwise be applicable to the Ship or the Borrower and, if the Lender shall so require, the Borrower shall enter into a "Carrier Initiative Agreement" with the United States Customs Service and to procure that such agreement (or any similar agreement hereafter introduced by any agency of the United States of America) is maintained by the Borrower in full force and effect; |
22.19 | to comply with and to ensure and procure that the Manager and all servants and agents of the Borrower and the Manager or any charterer of the Ship shall comply with, the ISM Code, the ISM Code Documentation, the ISPS Code, the ISPS Code Documentation, all Sanctions, all Environmental Laws and all legislation of any state or government in relation to the Ship, her ownership, operation and management or to the business of the Borrower and the Manager, including, without limitation, requirements |
22.20 | to hold and procure that the Manager shall hold all appropriate ISM Documentation and to provide the Lender with copies of the relevant ISM Code Documentation and ISPS Code Documentation duly issued to the Borrower, the Manager and the Ship pursuant to the ISM Code and the ISPS Code; |
22.21 | to keep, or procure that it is kept, on board the Ship a copy of all relevant ISM Code Documentation and ISPS Code Documentation respectively; |
22.22 | to perform and discharge all duties and liabilities imposed on the Borrower under any charter, bill of lading or other contract relating to the Ship; |
22.23 | not to remove or permit the removal of any part of the Ship or any equipment belonging thereto, nor make or permit to be made any alteration in the structure type or speed of the Ship which materially reduces the value of the Ship (unless such removal or alteration is required by statute or by her Classification Society); |
22.24 | at all reasonable times and on reasonable notice, to permit and procure that the Lender or its authorised representative is permitted full and complete access to the Ship for the purpose of inspecting the state and condition of the Ship and her cargo and papers and at the written request of the Lender deliver and procure the delivery for inspection copies of any and all contracts and documents relating to the Ship whether on board or not; |
22.25 | to keep and procure that the Lender is kept fully informed as to the use, the employment and the position of the Ship and promptly provide and procure that the Lender is provided with information concerning the classification, status and insurance of the Ship from time to time as and when so required in writing by the Lender; |
22.26 | when so requested by the Lender, to appoint and procure that two firms of independent sale and purchase shipbrokers shall be appointed, as nominated or approved by the Lender, to give valuations of the Ship in Dollars, such valuations to be made without physical inspection (unless otherwise required by the Lender) and on the basis of an arm's-length transaction by a willing buyer from a willing seller and where the Ship is subject to a charter, with or without taking into account such charter (whichever results to a lower value of the Ship); The average of the aforesaid two valuations shall constitute the Market Value of the Ship. In case the difference between the said two valuations is more than ten per cent (10%), a third firm of independent sale and purchase shipbrokers, nominated or approved by the Lender, will be appointed and the average of all three such valuations shall constitute the Market Value of the Ship. The fees of the shipbrokers appointed to give such valuations shall be paid by the Borrower; |
22.27 | in the event of Compulsory Acquisition of the Ship by any Government Entity, to execute and procure the execution of any assignment that the Lender may request in relation to any and all amounts which such Government Entity shall be liable to pay as |
22.28 | to maintain the appointment of the Manager as manager of the Ship and not to vary in any material respect or terminate this appointment; |
22.29 | to execute and procure the execution by each other Security Party of any further document or documents required by the Lender in order to perfect or complete the security created by the Finance Documents; |
22.30 | to execute and deliver to the Lender such documents of transfer as the Lender may require in the event of sale of the Ship pursuant to any power of sale contained in the Mortgage or which the Lender may have in law; |
22.31 | to immediately notify the Lender by fax, confirmed forthwith by letter, of: |
22.32 | to keep prominently in the Chart Room and in the Master's cabin of the Ship a framed duly completed notice printed in plain type of such size that the area of print shall cover a space not less than six inches wide and nine inches high reading as follows: |
22.33 | to comply with its respective obligations under each Subject Document and not to (and ensure and procure that no other party thereto will) vary, amend or terminate any of the aforesaid documents. |
23 | SECURITY MARGIN |
23.01 | In the event that at any time during the Security Period the Security Value is less than the Security Requirement, then the Borrower shall within thirty (30) Banking Days of receipt of a written notice from the Lender advising the Borrower of the amount of such deficiency (which notice in the absence of manifest error shall be conclusive) either provide to the Lender additional security (valued in accordance with normal banking practice) which shall in all respects be acceptable and satisfactory to the Lender in its sole discretion and which in the opinion of the Lender shall be equal to the shortfall or prepay in accordance with Clause 10 such part (at least) of the Facility that in the opinion of the Lender is required in order to eliminate the shortfall. |
24 | EVENTS OF DEFAULT |
24.01 | If: |
24.01.01 | the Borrower fails to pay on the due date for payment any amount which shall have become due hereunder and/or under the other Finance Documents; |
24.01.02 | any representation, warranty or statement made by the Borrower in this Agreement and/or in any of the other Finance Documents or any certificate, statement or opinion delivered or made hereunder or under the other Finance Documents or in connection herewith or with the other Finance Documents shall be incorrect or inaccurate when made; |
24.01.03 | the Borrower fails to duly and punctually perform or observe any other term of this Agreement or of the other Finance Documents and in any such case such failure, if capable of remedy, shall continue for fourteen (14) Banking Days after the Lender shall have given to the Borrower written notice of such failure; |
24.01.04 | any other Financial Indebtedness of the Borrower exceeding in aggregate One million Dollars ($1,000,000) becomes due and payable or, with the giving of notice or lapse of time or any other condition or a combination thereof, capable of being declared due and payable prior to its stated maturity by reason of any circumstance |
24.01.05 | the Borrower enters into voluntary or involuntary bankruptcy, liquidation or dissolution, or becomes insolvent, or an administrator, administrative receiver, receiver or liquidator is appointed on all or a material part of its undertaking or assets or proceedings are commenced by or against it under any reorganisation, arrangement, readjustment of debts, dissolution or liquidation law or regulation, or if any event shall occur which, under the relevant system of law, shall have an equivalent effect; |
24.01.06 | the Borrower ceases or threatens to cease to carry on the whole or a substantial part of its business; |
24.01.07 | there shall be a transfer or disposal of all or a substantial part of the assets of the Borrower, whether by one or a series of transactions, related or not, without the prior written consent of the Lender; |
24.01.08 | any event occurs having a Material Adverse Effect on the Borrower; |
24.01.09 | the value of the assets of the Borrower is less than its respective liabilities (taking into account contingent and prospective liabilities); |
24.01.10 | the Borrower reduces its authorised or issued or subscribed capital; |
24.01.11 | any governmental or other consent, licence or authority required to make any one of this Agreement and/or the other Finance Documents legal, valid, binding, enforceable and admissible in evidence or required to enable the Borrower to perform its duties and discharge its liabilities hereunder or under any one or more of the other Finance Documents is withdrawn or ceases to be in full force and effect unless the Borrower procures that such consent, licence or authority is reinstated or re-issued to the satisfaction of the Lender within fourteen (14) Banking Days of the said withdrawal or cessation; |
24.01.12 | any distress or execution is levied or enforced against a material (in the opinion of the Lender) part of the property and assets of the Borrower and such distress or execution is not withdrawn or discharged within fourteen (14) Banking Days; |
24.01.13 | the Borrower stops payment of, or is unable to, or admits inability to pay its debts as they fall due, or enters into any composition or other arrangement with its creditors generally or declares a general moratorium on the payment of indebtedness; |
24.01.14 | the Borrower becomes a Prohibited Person or becomes owned or controlled by, or acts directly or indirectly on behalf of, a Prohibited Person or the Borrower becomes the owner or controller of a Prohibited Person; |
24.01.15 | any proceeds of the Facility are made available, directly or indirectly, to or for the benefit of a Prohibited Person or otherwise is, directly or indirect! applied in a manner or for a purpose prohibited by Sanctions; |
24.01.16 | the Borrower becomes a FATCA FFI or a US Tax Obligor; |
24.01.17 | the Borrower is not in compliance, in all respects, with all Sanctions; |
24.01.18 | any of the events referred to in Clauses 24.01.01 up to and inclusive 24.01.17 occurs, mutatis mutandis, in respect of any other Security Party or any other member of the Group; |
24.01.19 | without limiting the generality of Clause 24.01.03, the Borrower is in breach of the provisions of Clause 20.37 and/or Clause 20.38 and/or Clause 23; |
24.01.20 | if (a) an Event of Default or a Potential Event of Default (in each case as defined in the Master Agreement) has occurred and is continuing under the Master Agreement or (b) an Early Termination Date (as defined in the Master Agreement) has occurred or been or become capable of being effectively designated under the Master Agreement or (c) a person entitled to do so gives notice of an Early Termination Date under Section 6(b)(iv) of the Master Agreement or (d) the Master Agreement is terminated, cancelled, suspended, rescinded or revoked or otherwise ceases to remain in full force and effect for any reason; |
24.01.21 | the Borrower and/or any other Security Party fails to comply within thirty (30) days from the Lender's written notice to the Borrower to that effect, to the full satisfaction of the Lender, with any requirements of the Lender in relation to the shares of the Borrower and the Manager and/or of their corporate shareholder(s) [including but without limitation any requirements of the Lender as to the approved form of the shares (registered or otherwise) of the Borrower and the Manager and/or of their corporate shareholder(s); |
24.01.22 | there is a change in the management or the legal ownership of a Borrower and/or the Manager or of any of their corporate shareholder(s) without the prior written consent of the Lender; |
24.01.23 | the Borrower sells, transfers, disposes of or (other than by Permitted Liens) encumbers the Ship or any interest or share therein, or agrees to do so without the prior written consent of the Lender; |
24.01.24 | the Ship is arrested or detained and such arrest or detention is not released within twenty five (25) days, or an order for the sale of the Ship is made by a court of competent jurisdiction or the Borrower ceases to retain possession and/or control of the Ship for a period in excess of twenty five (25) days; |
24.01.25 | the Ship becomes a Total Loss and the Borrower fails to make the payment required to be made under Clause 10.01 in respect of such Total Loss within the time set forth in Clause 10.02.02; |
24.01.26 | the Ship is laid up for a period exceeding thirty (30) days without the prior written consent of the Lender; |
24.01.27 | the country of registration of the Ship becomes involved in war (whether or not declared) or civil war or is occupied by any other power and the Lender in its discretion considers that, as a result, the security conferred by any of the Finance Documents is materially prejudiced; |
24.01.28 | an Event of Default under any one of the Subject Documents (as defined therein) occurs; |
24.01.29 | the Subject Documents or any of them is terminated, revoked, cancelled, or otherwise ceases, in whole or in part, to be valid, binding and enforceable; |
24.01.30 | any Security Party repudiates or evidences an intention to repudiate any one or more of the Subject Documents; |
24.01.31 | the Guarantor ceases to be actively involved in the business of the Borrower and/or the Manager; |
24.01.32 | the fulfilment of any one or more of the obligations covenants and undertakings contained in any one or more of this Agreement, the other Finance Documents and any other documents executed pursuant hereto or thereto or the exercise of any of the rights vested in the Lender hereunder or thereunder becoming either unlawful under any applicable law or unauthorised by any authority having jurisdiction or otherwise impossible; |
24.02 | Upon the occurrence of an Event of Default which is continuing and at any time thereafter the Lender: |
24.02.01 | may by written notice to the Borrower declare that any undrawn part of the Facility shall be cancelled, whereupon the same shall be cancelled; |
24.02.02 | may by written notice to the Borrower declare the Indebtedness immediately due and payable whereupon the same shall become so payable to the Lender; |
24.02.03 | take any other action, exercise any other right or pursue any other remedy conferred upon the Lender by this Agreement and/or the other Finance Documents or by any applicable law or regulation or otherwise as a consequence of such Event of Default; |
24.02.04 | shall be entitled but not obliged to, exercise all its rights under the Master Agreement and to, inter alia, cancel, net out, unwind, terminate or liquidate all or any part of the rights, benefits and obligations created by any Designated Transaction and/or the Master Agreement. Without prejudice to or limitation of the obligations of the Borrower hereunder and under the Master Agreement, in the event that the Lender exercises any of its rights hereunder and such exercise results in all or part of a Designated Transaction being terminated, such termination shall constitute a Terminated Transaction (as defined in section 14 of the Master Agreement) effected by the Lender after an Event of Default (as so defined in that section 14) by the Borrower and, accordingly, the Lender shall be entitled to recover from the Borrower |
24.03 | All Proceeds received by the Lender under or pursuant to any of the Finance Documents after the happening of any Event of Default shall be applied by the Lender in payment of the Indebtedness in accordance with the terms of Clause 12. |
24.04 | On the occurrence of an Event of Default which is continuing the Lender shall have the right and power to order the Ship to proceed forthwith at the Borrower's risk and expense to a port or place nominated by the Lender. The Borrower undertakes to give the necessary instructions to the Master of the Ship to comply with any such order of the Lender and if the Borrower fails to give such instructions for any reason whatsoever the Lender shall have the right and power to give such instructions direct to the Master. |
25 | SET-OFF |
25.01 | The Borrower hereby authorises the Lender, without prejudice and in addition to all rights of set off, combination, lien or otherwise which the Lender has at law or under any agreement between the Lender and the Borrower, at any time following the occurrence of an Event of Default which is continuing without demand and without notice: |
25.01.01 | to set off any amount to the credit of any existing accounts of the Borrower with the Lender, (whether deposit, loan or otherwise, in the name of the Borrower or otherwise) including, without limitation, the Accounts, in or towards satisfaction of all amounts due from the Borrower under this Agreement and/or any one or more of the other Finance Documents; and |
25.01.02 | to transfer and apply any amount standing to the credit of any such existing accounts of the Borrower with any associate or subsidiary of the Lender in or towards satisfaction of all amounts due from the Borrower under this Agreement and/or any one or more of the other Finance Documents. |
25.02 | For that purpose the Lender has the power, without limitation, to: |
25.02.01 | break, or alter the maturity of, all or any part of a deposit of the Borrower; and/or |
25.02.02 | enter into any other transaction or make any entry with regard to the credit balance which the Lender considers appropriate. |
25.03 | Without prejudice to its rights hereunder and/or under the Master Agreement, the Lender may at the same time as, or at any time after, an Event of Default or a Potential Event of Default occurs under this Agreement or the Borrower's default under the Master Agreement, set-off any amount due now or in the future from the Borrower to the Lender under this Agreement against any amount due from the Lender to the Borrower under the Master Agreement and apply the first amount in discharging the second amount. The effect of any set-off under this Clause 25.03 shall be effective to |
25.04 | Where such set-off or transfer requires the conversion of one currency into another, such conversion shall be calculated at the spot rate as conclusively determined by the Lender for purchasing such currency with the currency in which the relevant amounts are denominated on the date of actual payment. |
26 | FEES |
26.01 | The Borrower shall pay to the Lender an availability fee of one per cent per annum (1%) on the from time to time available and undrawn amount of the Facility (the " Availability Fee "); such Availability Fee for the Facility shall accrue from day to day for a period starting on the date of signing of this Agreement and ending on the earlier of (i) the Drawdown Date of the Facility and (ii) on the Termination Date and shall be calculated upon the exact number of days which have elapsed on the basis of a year consisting of three hundred and sixty (360) days and shall be payable quarterly in arrears. |
26.02 | The Borrower shall pay to the Lender an arrangement fee of zero point eighty per cent (0.80%) of the final amount to be drawn down, of which, approximately twenty five per cent (25%) thereof i.e. US Dollars Thirty Nine thousand Nine hundred (US$39,900) has been paid by the Borrower on the 19 December 2014 and the remaining seventy five per cent (75%) thereof will be paid to the Lender simultaneously with the Drawdown of the Facility on the Drawdown Date. |
27 | EARNINGS AND RETENTION ACCOUNTS |
27.01 | The Borrower hereby agrees to ensure and procure that all the Earnings of the Ship, shall be paid into the Earnings Account, which shall be charged in favour of the Lender by the Earnings Account Charge. Unless and until an Event of Default or a Potential Event of Default occurs, whereupon the Lender may give notice to the Borrower that it requires that all Earnings of the Ship are paid directly to the Lender, all amounts in the Earnings Account shall be applied as follows: |
27.01.01 | first, towards the payment of fees and costs that are due and payable by the Borrower to the Lender under the Finance Documents; |
27.01.02 | second, (in case the Retention Account provided for in Clause 27.02 has been opened) towards payment to the Retention Account of the amounts that may be required to be transferred to the credit thereof in accordance with Clause 27.02; and |
27.01.03 | third, any balance thereafter remaining in the Earnings Accounts shall be available to the Borrower for the payment of the Operating Expenses of the Ship as well as for the payment of dividends and the repayment of any shareholders' loans. |
27.02 | Within fifteen (15) days from the written notice of the Lender to the Borrower to that effect, the Borrower shall open the Retention Account with the Lender, which shall be charged in favour of the Lender by the Retention Account Charge. date falling |
27.03 | The Lender shall pay interest to the Borrower on the credit balances from time to time in the Retention Account at the rate, which it usually pays on equivalent amounts and in accordance with its usual practice. |
27.04 | On each Repayment Date the Lender shall transfer from the Retention Account to the Loan Account(s) an amount equal to each relevant Repayment Instalment payable on that date and on each relevant Interest Payment Date the Lender shall transfer from the Retention Account to the Loan Account(s) an amount equal to the interest payable in respect thereof under Clause 7 on that date. |
27.05 | In the event that there are insufficient funds in the Earnings Account to pay the amounts referred to in Clause 27.02 above the Borrower agrees to pay to the Lender an amount equal to the difference between the actual amount in the Earnings Account and the amount due under Clause 27.02 on the first Banking Day in such month. |
27.06 | The Lender acknowledges that the Borrower shall, unless and until an Event of Default or a Potential Event of Default shall occur and the Lender shall direct to the contrary, be entitled from time to time, to require that moneys for the time being standing to the credit of the Accounts be transferred in such amounts and for such periods as the Borrower selects to fixed-term deposit accounts ("deposit accounts") opened in the name of the Borrower with the Lender. |
27.07 | The Borrower shall not be entitled to withdraw moneys standing to the credit of the relevant Account which are the subject of a fixed term deposit until the expiry of the period of such deposit unless the Borrower shall, on withdrawing such moneys pay to the Lender on demand any loss or expense which the Lender shall certify that it has sustained or incurred as a result of such withdrawal being made prior to the expiry of the period of the relevant deposit and the Lender shall be entitled to debit the relevant Account for the amount so certified prior to such withdrawal being made. In the event that any moneys so deposited are to be applied pursuant to this Clause 27, the Borrower shall, on such application being made, pay to the Lender on demand any loss or expense which the Lender shall certify that it has sustained or incurred as a result of such application being made prior to the expiry of the period of the relevant deposit and the Lender shall be entitled to debit the relevant Account for the amount so certified prior to such application being made. Any deposit accounts shall, for all the purposes |
28 | EXPENSES |
28.01 | Whether or not the Facility or any part thereof, is actually drawn down the Borrower shall reimburse the Lender on demand for all costs, charges and expenses incurred by the Lender in connection with the preparation, negotiation and conclusion of this Agreement and the other Finance Documents including the fees and expenses of the Lender's legal advisers. |
28.02 | The Borrower shall reimburse the Lender on demand for all charges and expenses (including legal fees) incurred by the Lender in or in connection with the exercise of the Lender's rights and powers under this Agreement and the other Finance Documents (including but not limited to the fees and charges of auditors, brokers, surveyors and lawyers instructed by the Lender) and with the actual, attempted or purported enforcement of, or preservation of rights under this Agreement and the other Finance Documents. |
29 | INDEMNITY |
29.01 | The Borrower hereunder undertakes and agrees to indemnify the Lender, upon the Lender's first demand, from and against any losses, costs or expenses (including legal expenses) which it incurs in consequence of any Event of Default including (but without limitation) all losses (including loss of profit for the then current Interest Period), premiums and penalties incurred or to be incurred in liquidating or redeploying deposits made by third parties or funds acquired or arranged to advance or maintain the Facility or any part thereof and any liability items which arise, or are asserted, under or in connection with any law relating to safety at sea. |
30 | ENVIRONMENTAL INDEMNITY |
30.01 | The Borrower undertakes to indemnify the Lender against all damages, losses, liabilities, costs, expenses, penalties, fines or proceedings which may be incurred or paid by or imposed on the Lender directly or indirectly at any time (whether before or alter the Indebtedness has been repaid in full) pursuant to any Environmental Law or any other environmental legislation of any state or government which would not have been incurred or paid by or imposed on the Lender had it not entered into this Agreement and/or the other Finance Documents. |
31 | CONFIDENTIALITY |
31.01 | The Lender agrees to keep all Confidential Information confidential and not to disclose it to anyone, save to the extent permitted by Clause 31.02 (Disclosure of Confidential Information) and Clause 31.03 (Disclosure to numbering service providers), and to ensure that all Confidential Information is protected with security measures and a degree of care that would apply to its own confidential information. |
31.02 | The Lender may disclose: |
31.02.01 | to any of its Affiliates and Related Funds and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives such Confidential Information as the Lender shall consider appropriate; |
31.02.02 | to any person: |
(a) | to (or through) whom it assigns or transfers (or may potentially assign or transfer) all or any of its rights and/or obligations under one or more Finance Documents and to any of that person's Affiliates, Related Funds, Representatives and professional advisers; |
(b) | with (or through) whom it enters into (or may potentially enter into), whether directly or indirectly, any sub-participation in relation to, or any other transaction under which payments are to be made or may be made by reference to, one or more Finance Documents and/or one or more Security Parties and to any of that person's Affiliates, Related Funds, Representatives and professional advisers; |
(c) | appointed by the Lender or by a person to whom Clause 31.02.02(a) or 31.02.02(b) applies to receive communications, notices, information or documents delivered pursuant to the Finance Documents on its behalf; |
(d) | who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in Clause 31.02.02(a) or 31.02.02(b); |
(e) | to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation; |
(f) | to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes; |
(g) | who is a Party; or |
(h) | with the consent of the Borrower; and |
31.02.03 | to any person appointed by the Lender or by a person to whom Clause 31.02.02(a) or 31.02.02(b) applies to provide administration or settlement services in respect of one or more of the Finance Documents including without limitation, in relation to the trading of participations in respect of the Finance Documents, such |
31.03 | Disclosure to numbering service providers |
31.03.01 | The Lender may disclose to any national or international numbering service provider appointed by the Lender to provide identification numbering services in respect of this Agreement, the Facility and/or one or more Security Parties the information to enable such numbering service provider to provide its usual syndicated loan numbering identification services. |
31.03.02 | The Parties acknowledge and agree that each identification number assigned to this Agreement, the Facility and/or one or more Security Parties by a numbering service provider and the information associated with each such number may be disclosed to users of its services in accordance with the standard terms and conditions of that numbering service provider. |
32 | LENDER'S BUSINESS |
32.01 | No provision of this Agreement will: |
32.01.01 | interfere with the right of the Lender to arrange its affairs (tax or otherwise) in whatever manner it thinks fit; |
32.01.02 | oblige the Lender to investigate or claim any credit, relief, remission or repayment available to it or the extent, order and manner of any claim; or |
32.01.03 | oblige the Lender to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax. |
33 | STAMP DUTIES - TAXES ETC |
33.01 | The Borrower shall pay any and all stamp, registration and similar taxes and charges of whatsoever nature which may be payable or determined to be payable on, or in connection with, the execution, registration, notarisation, performance or enforcement of this Agreement or the other Finance Documents. The Borrower shall indemnify the Lender against any and all liabilities with respect to or resulting from any delay or omission on the part of the Borrower to pay any such taxes. |
34 | DETERMINATIONS |
34.01 | Each determination of an Interest Rate or a Default Rate or of any amount in respect of principal or interest or fees or expenses by the Lender in accordance with this Agreement and every other determination or certification by the Lender under this Agreement shall be conclusive and binding on the Borrower in the absence of manifest error. |
35 | NO WAIVER |
35.01 | No failure to exercise and no delay on the part of the Lender in exercising any right or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right or power preclude any other or future exercise thereof or the exercise of any other right or power. The rights, powers and remedies herein provided are cumulative and not exclusive of any rights, powers or remedies provided by law. |
36 | PARTIAL INVALIDITY |
36.01 | In the event that any term or condition of this Agreement is rendered or declared illegal, invalid or inoperative in whole or in part by any statute rule or regulation or any decision of any court or tribunal of competent jurisdiction then such determination or declaration shall neither affect the validity of any other term or condition of this Agreement which (save as aforesaid) will remain in full force and effect nor the legality, validity or enforceability of such term or condition under the laws of any other jurisdiction. |
37 | TRANSFER AND ASSIGNMENT |
37.01 | This Agreement shall bind and be to the benefit of the Borrower and the Lender and their respective successors and permitted assigns. |
37.02 | The Borrower may not assign any of its rights, powers, duties or liabilities hereunder. |
37.03 | The Lender may at any time and without the prior consent of the Borrower assign or transfer all or part of the Facility and its rights and powers under any one or more of this Agreement and the other Finance Documents to any other bank or other financial institution (the " Transferee Lender " ). |
37.04 | The Lender may at any time and from time to time change its lending office in respect of the whole or any part of its participation in the Facility. The Lender shall notify the Borrower of any such change in the lending office as soon as is practicable. |
37.05 | If the Lender assigns or transfers all or any part of its rights, powers duties and liabilities hereunder pursuant to Clause 37.03 the Borrower undertakes immediately on being requested to do so by the Lender to enter into and procure that the other parties to the Finance Documents shall enter into, such documents as may be necessary or desirable to transfer to the Transferee Lender all or part of the Lender's interest in the Finance Documents and all relevant references in this Agreement and the other Finance Documents to the Lender shall thereafter be construed as a reference to the Lender and/or its assignee or transferee (as the case may be) to the extent of their respective interests. |
38 | NON-IMMUNITY |
38.01 | The Borrower does not have any right of immunity from set-off, suit or execution, attachment or other legal process under the laws of the United Kingdom or the Republic of Greece or the Republic of the Marshall Islands or the Republic of Liberia. |
38.02 | The exercise by the Borrower of its rights and performance and discharge of its duties and liabilities hereunder will constitute commercial acts done and performed for private and commercial purposes. |
38.03 | To the extent that the Borrower may in any jurisdiction in which proceedings may at any time be taken for the enforcement of this Agreement and/or any of the other Finance Documents claim for itself or its assets immunity from suit, judgment, execution, attachment (whether, before judgment or otherwise) or other legal process, and to the extent that in any such jurisdiction there may be attributed to itself or its assets any such immunity (whether or not claimed), the Borrower hereby irrevocably agrees not to claim and hereby irrevocably waives any such immunity to the full extent permitted by the laws of such jurisdiction. |
39 | NOTICES |
39.01 | Unless otherwise specifically provided, any notice under or in connection with any Finance Document shall be given by letter or fax; and references in the Finance Documents to written notices, notices in writing and notices signed by particular persons shall be construed accordingly. |
39.02 | A notice shall be sent: |
(a)
|
to the Borrower:
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c/o EUROBULK LTD
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|
4, Messogiou & Evropis Street
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|||
151 24 Maroussi
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Greece
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|||
Fax No.: +30 211 1804097
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(b)
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to the Lender:
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||
111 Messoghion Ave,
Athens,
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Greece, Tel: +30 210 6961457
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|||
Attn. Ms Katerina Eleftheriou.
|
39.03 | Subject to Clauses 39.04 and 39.05: |
39.04 | However, if under Clause 39.03 a notice would be deemed to be served: |
39.05 | Clauses 39.03 and 39.04 do not apply if the recipient of a notice notifies the sender within one (1) hour after the time at which the notice would otherwise be deemed to be served that the notice has been received in a form, which is illegible in a material respect. |
39.06 | A notice under or in connection with a Finance Document shall not be invalid by reason that the manner of serving it does not comply with the requirements of this Agreement or, where appropriate, any other Finance Document under which it is served if the failure to serve it in accordance with the requirements of this Agreement or other Finance Document, as the case may be, has not caused any party to suffer any significant loss or prejudice. |
39.07 | Any notice under or in connection with a Finance Document shall be in English or in Greek. |
39.08 | In this Clause "notice" includes any demand, consent, authorisation, approval, instruction, waiver or other communication. |
40 | SUPPLEMENTAL |
40.01 | The rights and remedies which the Finance Documents give to the Lender are: |
40.02 | If any provision of a Finance Document is or subsequently becomes void, unenforceable or illegal, that shall not affect the validity, enforceability or legality of the other provisions of that Finance Document or of the provisions of any other Finance Document. |
40.03 | A Finance Document may be executed in any number of counterparts. |
40.04 | A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Agreement. |
40.05 | This Agreement supersedes the terms and conditions contained in any correspondence relating to the subject matter of this Agreement exchanged between the Lender and the Borrower or their representatives prior to the date of this Agreement, including without limitation, the Commitment Letter. |
41 | LAW AND JURISDICTION |
41.01 | This Agreement shall be governed by, and construed in accordance with, English law. |
41.02 | Subject to Clause 41.03, the courts of England shall have exclusive jurisdiction to settle any disputes, which may arise out of or in connection with this Agreement. |
41.03 | Clause 41.02 is for the exclusive benefit of the Lender, which reserves the right: |
41.04 | The Borrower irrevocably appoint Messrs. Hill Dickinson Service (London) Limited presently at lrongate House, Duke's Place, London EC3A 7LP England, Att. Mr. Patrick Hawkins, tel: +44 207 2839033 email: patrick.hawkins@hilldickinson.com to act as their agent to receive and accept on their behalf any process or other document relating to any proceedings in the English courts which are connected with this Agreement. |
41.05 | The Borrower irrevocably designate and appoint Mr. Alexandros Kapellaris, Advocate, with offices at 42, Panepistimiou Street, 106 79 Athens, Greece, as agent for the service of process in Greece ("antiklitos") and agree to consider any legal process or any demand or notice made served by or on behalf of the Lender on the said agent as being made to the Borrower. The designation of such an authorized agent (antiklitos) shall remain irrevocable until all indebtedness shall have been paid in full in accordance with the terms of this Agreement and the other Finance Documents. |
41.06 | Nothing in this Clause 41 shall exclude or limit any right which the Lender may have (whether under the law of any country, an international convention or otherwise) with regard to the bringing of proceedings, the service of process, the recognition or enforcement of a judgment or any similar or related matter in any jurisdiction. |
41.07 | In this Clause 41, "proceedings" means proceedings of any kind, including an application for a provisional or protective measure or enforcement court order (diatagi pliromis). |
42 | THIS AGREEMENT AND THE OTHER FINANCE DOCUMENTS |
42.01 | In case of any conflict between the provisions of this Agreement and any of the other Finance Documents the provisions of this Agreement shall prevail. |
SIGNED by
|
)
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Mr. Gerassimos Mentoros
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) /s/ Mr. Gerassimos Mentoros
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for and on behalf of
|
)
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HSBC BANK PLC
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)
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In the presence of: /s/ Christos Gourikis
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)
|
SIGNED by
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)
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Ms Stephania Karmiri
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) /s/ Ms Stephania Karmiri
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for and on behalf of
|
)
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ULTRA TWO SHIPPING LTD
|
)
|
in the presence of: /s/ Christos Gourikis
|
)
|
1. | We refer to the financial agreement dated .......... (the " Financial Agreement ") and made between ourselves, as borrower and yourselves as lender, in connection with a loan facility of up to ………. |
2. | We request to borrow the Facility as follows: |
(a) | Amount: $ ............; |
(b) | Drawdown Date: .............; |
(c) | Duration of the first Interest Period shall be ……....... months; and |
(d) | Payment instructions: ………….. |
3. | We represent and warrant that: |
(a) | the representations and warranties in Clause 17 of the Financial Agreement and in the other Finance Documents would remain true and not misleading if repeated on the date of this notice with reference to the circumstances now existing; |
(b) | no Event of Default has occurred or will result from the borrowing of the Facility. |
4. | This notice cannot be revoked without your prior written consent of the Lender. |
5. | We authorise you to deduct from the proceeds of the Facility the amount of the fees referred to in Clause 26 and all the legal fees and disbursements payable pursuant to Clause 19.01.28. |
Clause
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Page
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|
1
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Interpretation
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1
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2
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Facility
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16
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3
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Position of the Lenders and Swap Bank
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16
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4
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Drawdown
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17
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5
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Interest
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18
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6
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Interest Periods
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20
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7
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Default Interest
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21
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8
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Repayment and Prepayment
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22
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9
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Conditions Precedent
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24
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10
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Representations and Warranties
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25
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11
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General Undertakings
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29
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12
|
Corporate Undertakings
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34
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13
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Insurance
|
35
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14
|
Ship Covenants
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41
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15
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Security Cover
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46
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16
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Payments and Calculations
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47
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17
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Application of Receipts
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49
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18
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Application of Earnings; Swap Payments
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50
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19
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Events of Default
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52
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20
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Fees and Expenses
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57
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21
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Indemnities
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58
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22
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No Set-Off or Tax Deduction
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61
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23
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Illegality, etc.
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62
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24
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Increased Costs
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63
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25
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Set-Off
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65
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26
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Transfers and Changes in Lending Offices
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65
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27
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Variations and Waivers
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70
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28
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Notices
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71
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29
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Supplemental
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73
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30
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Law and Jurisdiction
|
74
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Schedule 1 Lenders and Commitments
|
76
|
|
Schedule 2 Drawdown Notice
|
77
|
|
Schedule 3 Condition Precedent Documents
|
78
|
|
Schedule 4 Mandatory Cost Formula
|
81
|
|
Schedule 5 Designation Notice
|
83
|
|
Schedule 6 Transfer Certificate
|
84
|
|
Schedule 7 Power of Attorney
|
88
|
|
Schedule 8 Form of Compliance Certificate
|
89
|
|
Execution Pages
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90
|
( 1 ) | ULTRA ONE SHIPPING LTD, a corporation incorporated in the Republic of Liberia whose registered office is at 80 Broad Street, Monrovia, Liberia as Borrower; |
( 2 ) | THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1, as Lenders; |
( 3 ) | HSH NORDBANK AG acting through its office at Gerhart-Hauptmann-Platz 50, D-20095 Hamburg, Germany, as Agent; |
( 4 ) | HSH NORDBANK AG acting through its office at Gerhart-Hauptmann-Platz 50, D-20095 Hamburg, Germany, as Mandated Lead Arranger; |
( 5 ) | HSH NORDBANK AG acting through its office at Gerhart-Hauptmann-Platz 50, D-20095 Hamburg, Germany, as Security Trustee; and |
( 6 ) | HSH NORDBANK AG acting through its office at Martensdamm 6, D-24103 Kiel, Germany, as Swap Bank. |
(A) | The Lenders have agreed to make available to the Borrower a senior secured post-delivery term loan facility in one advance in an amount up to the lesser of (i) $19,000,000 and (H) 62.5 per cent. of the Initial Market Value of the Ship for the purpose of part financing the Contract Price of the Ship. |
(B) | The Swap Bank has agreed to enter into interest rate swap transactions with the Borrower from time to time to hedge the Borrower's exposure under this Agreement to interest rate fluctuations. |
(C) | The Lenders and the Swap Bank have agreed to share pari passu in the security to be granted to the Security Trustee pursuant to this Agreement. |
1. | INTERPRETATION |
1.1 | Definitions |
(a) | 30 April 2016 (or such later date as the Agent may, with the authorisation of the Lenders, agree with the Borrower); or |
(b) | if earlier, the date on which the Total Commitments are fully borrowed, cancelled or terminated; |
(a) | the agreements on capital requirements, a leverage ratio and liquidity standards contained in "Basel III: A global regulatory framework for more resilient banks and banking systems", "Basel III: International framework for liquidity risk measurement, standards and monitoring" and "Guidance for national authorities operating the countercyclical capital buffer" published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated; |
(b) | the rules for global systemically important banks contained in "Global systemically important banks: assessment methodology and the additional loss absorbency requirement - Rules text" published by the Basel Committee on Banking Supervision in November 2011, as amended, supplemented or restated; and |
(c) | any further guidance or standards published by the Basel Committee on Banking Supervision relating to "Basel III"; |
(a) | it is entered into by the Borrower pursuant to the Master Agreement with the Swap Bank which, at the time the Transaction is entered into, is also a Lender; |
(b) | its purpose is the hedging of the Borrower's exposure under this Agreement to fluctuations in LIBOR arising from the funding of the Loan (or any part thereof) for a period expiring no later than the Final Repayment Date; and |
(c) | it is designated by the Swap Bank, by delivery by the Swap Bank to the Borrower and the Agent of a notice of designation in the form set out in Schedule 5, as a Designated Transaction for the purposes of the Finance Documents; |
(a) | except to the extent that they fall within paragraph (b); |
(i); | all freight, hire and passage moneys; |
(ii) | compensation payable to the Borrower or the Security Trustee in the event of requisition of the Ship for hire; |
(iii) | remuneration for salvage and towage services; |
(iv) | demurrage and detention moneys; |
(v) | damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of the Ship; and |
(vi) | all moneys which are at any time payable under any Insurances in respect of loss of hire; and |
(b) | if and whenever the Ship is employed on terms whereby any moneys falling within paragraphs (a)(i) to (vi) are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or sharing arrangement which is attributable to the Ship; |
(a) | any claim by any governmental, judicial or regulatory authority which arises out of an Environmental Incident or an alleged Environmental Incident or which relates to any Environmental Law; or |
(b) | any claim by any other person which relates to an Environmental Incident or to an alleged Environmental Incident, |
(a) | any release of Environmentally Sensitive Material from the Ship; or |
(b) | any incident in which Environmentally Sensitive Material is released from a vessel other than the Ship and which involves a collision between the Ship and such other vessel or some other incident of navigation or operation, in either case, in connection with which the Ship is actually or potentially liable to be arrested, attached, detained or injuncted and/or the Ship and/or the Borrower and/or any operator or manager of the Ship is at fault or allegedly at fault or otherwise liable to any legal or administrative action; or |
(c) | any other incident in which Environmentally Sensitive Material is released otherwise than from the Ship and in connection with which the Ship is actually or potentially liable to be arrested and/or where the Borrower and/or any operator or manager of the Ship is at fault or allegedly at fault or otherwise liable to any legal or administrative action; |
(a) | this Agreement; |
(b) | the Master Agreement; |
(c) | the Master Agreement Assignment; |
(d) | the Corporate Guarantee; |
(e) | the Agency and Trust Agreement; |
(f) | the General Assignment; |
(g) | the Mortgage; |
(h) | the Account Pledges; |
(i) | any Charterparty Assignments; |
(j) | the Approved Manager's Undertaking; and |
(k) | any other document (whether creating a Security Interest or not) which is executed at any time by the Borrower, the Corporate Guarantor, the Approved Manager or any other person as security for, or to establish any form of subordination or priorities arrangement in relation to, any amount payable to the Lenders and/or the Swap Bank under this Agreement or any of the other documents referred to in this definition and, in the singular, means any of them; |
(a) | for principal, interest or any other sum payable in respect of any moneys borrowed or raised by the debtor; |
(b) | under any loan stock, bond, note or other security issued by the debtor; |
(c) | under any acceptance credit, guarantee or letter of credit facility made available to the debtor; |
(d) | under a financial lease, a deferred purchase consideration arrangement or any other agreement having the commercial effect of a borrowing or raising of money by the debtor; |
(e) | under any interest or currency swap, exchange or any other kind of derivative transaction entered into by the debtor or, if the agreement under which any such transaction is entered into requires netting of mutual liabilities, the liability of the debtor for the net amount; or |
(f) | under receivables sold or discounted (other than any receivables to the extent that they are sold on a non-recourse basis); or |
(g) | under a guarantee, indemnity or similar obligation entered into by the debtor in respect of a liability of another person which would fall within (a) to (e) if the references to the debtor referred to the other person; |
(a) | all policies and contracts of insurance and any reinsurance, policies or contracts, including entries of the Ship in any protection and indemnity or war risks association, effected in respect of the Ship, its Earnings or otherwise in relation to it whether before, on or after the date of this Agreement; and |
(b) | all rights (including, without limitation, any and all rights or claims which the Borrower may have under or in connection with any cut-through clause relative to any reinsurance contract relating to the aforesaid policies or contracts of insurance) and other assets relating to, or derived from, any of the foregoing, including any rights to a return of a premium and any rights in respect of any claim whether or not the relevant policy, contract of insurance or entry has expired on or before the date of this Agreement; |
(a) | the rate per annum equal to the offered quotation for deposits in Dollars for a period equal to, or as near as possible equal to, the relevant Interest Period which appears on the Screen Rate; or |
(b) | if no the Screen Rate is available, the rate per annum determined by the Agent to be the arithmetic mean (rounded upwards, if necessary, to the nearest one-sixteenth of one per cent.) of the rates per annum notified to the Agent by each Reference Bank as the rate at which deposits in Dollars are offered to that Reference Bank by leading banks in the London Interbank Market at that Reference Bank's request at or about 11.00 a.m. (London time) on the Quotation Date for that Interest Period for a period equal to that Interest Period and for delivery on the first Business Day of it; |
(a) | before the Advance is made, Lenders whose Commitments total 66.7 per cent. of the Total Commitments; and |
(b) | after the Advance is made, Lenders whose Contributions total 66.7 per cent. of the Loan; |
(a) | the business, property, assets, liabilities, operations or condition (financial or otherwise) of the Borrower and/or the Guarantor taken as a whole; |
(b) | the ability of the Borrower and/or the Guarantor to comply with or perform any of its obligations or discharge any of its liabilities, under any Finance Document as they fall due; or |
(c) | the validity, legality or enforceability of any Finance Document; |
(a) | Security Interests created by the Finance Documents; |
(b) | liens for unpaid master's and crew's wages in accordance with usual maritime practice; |
(c) | liens for salvage; |
(d) | liens arising by operation of law for not more than 2 months' prepaid hire under any charter in relation to the Ship not prohibited by this Agreement; |
(e) | liens for master's disbursements incurred in the ordinary course of trading and any other lien arising by operation of law or otherwise in the ordinary course of the construction, operation, repair or maintenance of the Ship, provided such liens do not secure amounts more than 30 days overdue (unless the overdue amount is |
(f) | any Security Interest created in favour of a plaintiff or defendant in any proceedings or arbitration as security for costs and expenses while the Borrower is actively prosecuting or defending such proceedings or arbitration in good faith; and |
(g) | Security Interests arising by operation of law in respect of taxes which are not overdue for payment or in respect of taxes being contested in good faith by appropriate steps and in respect of which appropriate reserves have been made; |
(a) | any Finance Document; |
(b) | any policy or contract of insurance contemplated by or referred to in Clause 13 or any other provision of this Agreement or another Finance Document; |
(c) | any other document contemplated by or referred to in any Finance Document; and |
(d) | any document which has been or is at any time sent by or to a Servicing Bank in contemplation of or in connection with any Finance Document or any policy, contract of insurance or other document falling within above paragraphs; |
(a) | England and Wales; |
(b) | the country under the laws of which that company is incorporated or formed; |
(c) |
a country in which that company has the centre of its main interests or which that
company's central management and control is or has recently been exercised; |
(d) | a country in which the overall net income of that company is subject to corporation tax, income tax or any similar tax; |
(e) | a country in which assets of that company (other than securities issued by, or loans to, related companies) having a substantial value are situated, in which that company maintains a branch or permanent place of business, or in which a Security Interest created by that company must or should be registered in order to ensure its validity or priority; and |
(f) | a country the courts of which have jurisdiction to make a winding up, administration or similar order in relation to that company, whether as a main or territorial or ancillary proceedings, or which would have such jurisdiction if their assistance were requested by the courts of a country referred to in above paragraphs (b) or (c); |
(a) | any transaction or matter contemplated by, arising out of, or n connection with a Pertinent Document; or |
(b) | any statement relating to a Pertinent Document or to a transaction or matter falling within paragraph above (a), |
(a) | a mortgage, charge (whether fixed or floating) or pledge, any maritime or other lien or any other security interest of any kind; |
(b) | the rights of a plaintiff under an action in rem; and |
(c) | any arrangement entered into by a person (A) the effect of which is to place another person (B) in a position which is similar, in economic terms, to the position in which |
(a) | all amounts which have become due for payment by the Borrower or any Security Party under the Finance Documents have been paid; |
(b) | no amount is owing or has accrued (without yet having become due for payment) under any Finance Document; |
(c) | neither the Borrower nor any Security Party has any future or contingent liability under Clauses 20, 21 or 22 or any other provision of this Agreement or another Finance Document; and |
(d) | the Agent, the Mandated Lead Arranger, the Security Trustee and the Majority Lenders do not consider that there is a significant risk that any payment or transaction under a Finance Document would be set aside, or would have to be reversed or adjusted, in any present or possible future bankruptcy of the Borrower or a Security Party or in any present or possible future proceeding relating to a Finance Document or any asset covered (or previously covered) by a Security Interest created by a Finance Document; |
(a) | actual, constructive, compromised, agreed or arranged total loss of the Ship; |
(b) | any expropriation, confiscation, requisition or compulsory acquisition of the Ship (excluding a requisition for hire for a fixed period not exceeding one year without any right to an extension), whether for full or part consideration, a consideration less than its proper value, a nominal consideration or without any consideration, which is effected by any government or official authority or by any person or persons claiming to be or to represent a government or official authority unless it is within 1 month from the date of such occurrence redelivered to the full control of the Borrower; |
(c) | any condemnation of the Ship by any tribunal or by any person or person claiming to be a tribunal; and |
(d) | any arrest, capture, seizure, confiscation or detention of the Ship (including any hijacking or theft) unless it is within 1 month redelivered to the full control of the Borrower; |
(a) | in the case of an actual loss of the Ship, the date on which it occurred or, if that is unknown, the date when the Ship was last heard of; |
(b) | in the case of a constructive, compromised, agreed or arranged total loss of the Ship, the earliest of: |
(i) | the date on which a notice of abandonment is given to the insurers; and |
(ii) | the date of any compromise, arrangement or agreement made by or on behalf of the Borrower with the Ship's insurers in which the insurers agree to treat the Ship as a total loss; and |
(c) | in the case of any other type of total loss, on the date (or the most likely date) on which it appears to the Agent (acting reasonably) that the event constituting the total loss occurred; |
1.2 | Construction of certain terms |
1.3 | Meaning of "month" |
(a) | On the Business Day following the numerically corresponding day if the numerically corresponding day is not a Business Day or, if there is no later Business Day in the same calendar month, on the Business Day preceding the numerically corresponding day; or |
(b) | on the last Business Day in the relevant calendar month, if the period started on the last Business Day in a calendar month or if the last calendar month of the period has no numerically corresponding day, |
1.4 | Meaning of " subsidiary " |
(a) | a majority of the issued shares in S (or a majority of the issued shares in S which carry unlimited rights to capital and income distributions) are directly owned by P or are indirectly attributable to P; or |
(b) | P has direct or indirect control over a majority of the voting rights attaching to the issued shares of S; or |
(c) | P has the direct or indirect power to appoint or remove a majority of the directors of S; or |
(d) | P otherwise has the direct or indirect power to ensure that the affairs of S are conducted in accordance with the wishes of P, |
1.5 | General Interpretation |
(a) | references to, or to a provision of, a Finance Document or any other document are references to it as amended or supplemented, whether before the date of this Agreement or otherwise; |
(b) | references to, or to a provision of, any law include any amendment, extension, re-enactment or replacement, whether made before the date of this Agreement or otherwise; |
(c) | words denoting the singular number shall include the plural and vice versa; and |
(d) | Clauses 1.1 to 1.5 apply unless the contrary intention appears. |
1.6 | Headings |
2. | FACILITY |
2.1 | Amount of facility |
2.2 | Lenders' participations in Advances |
2.3 | Purpose of Advance |
3. | POSITION OF THE LENDERS AND SWAP BANK |
3.1 | Interests several |
3.2 | Individual right of action |
3.3 | Proceedings requiring Majority Lender consent |
3.4 | Obligations several |
(a) | the obligations of the other Lenders or the Swap Bank being increased; nor |
(b) | the Borrower, any Security Party, any other Lender or the Swap Bank being discharged (in whole or in part) from its obligations under any Finance Document or under the Master Agreement; |
4. | DRAWDOWN |
4.1 | Request for the Advance |
4.2 | Availability |
(a) | the Drawdown Date has to be a Business Day during the Availability Period; |
(b) | the amount of the Advance shall be applied in paying the Construction Cost; |
(c) | the Advance shall not exceed the relevant Maximum Advance Amount; |
(d) | any undrawn portion of the Total Commitments in respect of the Advance to occur, upon the determination of the Initial Market Value, shall be automatically cancelled as at the Drawdown Date; and |
(e) | the amount of the Advance shall not exceed the Total Commitments. |
4.3 | Notification to Lenders of receipt of the Drawdown Notice |
(a) | the amount of the Advance to which the Drawdown Notice relates and the Drawdown Date; |
(b) | the amount of that Lender's participation in the Advance; and |
(c) | the duration of the first Interest Period in respect of the Advance. |
4.4 | Drawdown Notice irrevocable |
4.5 | Lenders to make available Contributions |
4.6 | Disbursement of Advance |
(a) | to the account which the Borrower specifies in the Drawdown Notice; and |
(b) | in the like funds as the Agent received the payments from the Lenders. |
4.7 | Disbursement of Advance to third party |
5. | INTEREST |
5.1 | Payment of normal interest |
5.2 | Normal rate of interest |
5.3 | Payment of accrued interest |
5.4 | Notification of Interest Periods and rates of normal interest |
(a) | each rate of interest; and |
(b) | the duration of each Interest Period, |
5.5 | Obligation of Reference Banks to quote |
5.6 | Absence of quotations by Reference Banks |
5.7 | Market disruption |
(a) | no rate is quoted on the Screen Rate and 2 or more of the Reference Banks do not, before 1:00 p.m. (London time) on the Quotation Date for an Interest Period, provide quotation to the Agent in order to fix LIBOR; or |
(b) | at least 1 Business Day before the start of an Interest Period, Lenders having Contributions together amounting to more than 50 per cent. of the Loan (or, if the Loan has not been made, Commitments amounting to more than 50 per cent. of the Total Commitments) notify the Agent that LIBOR fixed by the Agent would not accurately reflect the cost to those Lenders of funding their respective Contributions (or any part of them) during the Interest Period in the London Interbank Market at or about 11.00 a.m. (London time) on the Quotation Date for the Interest Period; or |
(c) | at least 3 Business Days before the start of an Interest Period, the Agent is notified by a Lender (the " Affected Lender ") that for any reason it is unable to obtain Dollars in the London Interbank Market or otherwise in order to fund its Contribution (or any part of it) during the Interest Period. |
5.8 | Notification of market disruption |
5.9 | Suspension of drawdown |
(a) | In a case falling within Clause 5.7(a) or 5.7(b), the Lender's obligation to advance the Advance; and |
(b) | In a case falling within Clause 5.7(c), the Affected Lender's obligation to participate in the Advance, |
5.10 | Negotiation of alternative rate of interest |
5.11 | Application of agreed alternative rate of interest |
5.12 | Alternative rate of interest in absence of agreement |
5.13 | Notice of prepayment |
5.14 | Prepayment; termination of Commitments |
(a) | on the date on which the Agent serves that notice, the Total Commitments or (as the case m ay requite) the Commitment of the Affected Lender shall be canceled; and |
(b) | on the last Business Day of the interest period set by the Agent, the Borrower shall prepay (without premium or penalty) the Loan or, as the case may be, the Affected Lender's Contribution, together with accrued interest thereon at the applicable rate plus the Margin and the Mandatory Cost (if any). |
5.15 | Application of prepayment |
5.16 | Interest rate hedging |
6. | INTEREST PERIODS |
6.1 | Commencement of Interest Periods |
6.2 | Duration of normal Interest Periods |
(a) | 3 months; or |
(b) | such other period (as notified by the Borrower to the Agent not later than 11:00 a.m. (Hamburg time) 3 Business Days before the commencement of the Interest Period in respect of the Advance) as the Agent may, with the authorisation of the Majority Lenders, agree with the Borrower; or |
(c) | 3 months, if the Borrower fails to notify the Agent of another period by the time specified in paragraph (a) or no such other period is agreed between the Borrower and the Agent in accordance with paragraph (a). |
6.3 | Duration of Interest Periods for Instalments |
6.4 | Non-availability of matching deposits for Interest Period selected |
7. | DEFAULT INTEREST |
7.1 | Payment of default interest on overdue amounts |
(a) | the date on which the Finance Documents provide that such amount is due for payment; or |
(b) | if a Finance Document provides that such amount is payable on demand, the date on which the demand is served; or |
(c) | if such amount has become immediately due and payable under Clause 19.4, the date on which it became immediately due and payable. |
7.2 | Default rate of interest |
(a) | in the case of an overdue amount of principal, the higher of the rates set out at Clauses 7.3(a) and 7.3(b); or |
(b) | in the case of any other overdue amount, the rate set out at Clause 7.3(b). |
7.3 | Calculation of default rate of interest |
(a) | the rate applicable to the overdue principal amount immediately prior to the relevant date (but only for any unexpired part of any then current Interest Period applicable to it); |
(b) | the aggregate of the Margin and the Mandatory Cost (if any) plus, in respect of successive periods of any duration (including at call) up to 3 months which the Agent may select from time to time: |
(i) | LIBOR; or |
(ii) | if the Agent (after consultation with the Reference Banks) determines that Dollar deposits for any such period are not being made available to any Reference Bank by leading banks in the London Interbank Market in the ordinary course of business, a rate from time to time determined by the Agent by reference to the cost of funds to the Reference Banks from such other sources as the Agent (after consultation with the Reference Banks) may from time to time determine. |
7.4 | Notification of interest periods and default rates |
7.5 | Payment of accrued default interest |
7.6 | Compounding of default interest |
7.7 | Application to Master Agreement |
8. | REPAYMENT AND PREPAYMENT |
8.1 | Amount of Instalments |
8.2 | Repayment Dates |
8.3 | Final Repayment Date |
8.4 | Voluntary prepayment |
8.5 | Conditions for voluntary prepayment |
(a) | a partial prepayment shall be $500,000 or a higher integral multiple thereof (or such other amount acceptable to the Agent acting on the instructions of the Majority Lenders); |
(b) | the Agent has received from the Borrower at least 5 Business Days' prior irrevocable written notice (each, a " Prepayment Notice ") specifying the amount to be prepaid and the date on which the prepayment is to be made; |
(c) | the Borrower has provided evidence satisfactory to the Agent that any consent required by the Borrower or any Security Party in connection with the prepayment has been obtained and remains in force, and that any regulation relevant to this Agreement which affects the Borrower or any Security Party has been complied with; |
(d) | the Borrower is in compliance with Clauses 8.10, 8.13 and 8.14 on or prior to the date of prepayment. |
8.6 | Optional facility cancellation |
8.8 | Mandatory prepayment |
(a) | is sold on or before the date on which the sale is completed by delivery of the Ship to the buyer; and |
(b) | becomes a Total Loss, on the earlier of the date falling 90 days after the Total Loss Date and the date of receipt by the Security Trustee of the proceeds of insurance relating to such Total Loss. |
8.9 | Effect of Prepayment Notice and Cancellation Notice |
(a) | in the case of a Prepayment Notice, the amount specified in that Prepayment Notice shall become due and payable by the Borrower on the date for prepayment specified in that Prepayment Notice; and |
(b) | in the case of a Cancellation Notice, the amount cancelled shall be permanently cancelled and may not be borrowed. |
8.10 | Amounts payable on prepayment |
8.11 | Application of partial prepayment or cancellation |
8.12 | No reborrowing |
8.13 | Unwinding of Designated Transactions |
8.14 | Prepayment of Swap Benefit |
9. | CONDITIONS PRECEDENT |
9.1 | Documents, fees and no default |
(a) | that, on or before the service of the Drawdown Notice, the Agent receives: |
(i) | the documents described in Part A of Schedule 3 in form and substance satisfactory to the Agent and its lawyers; and |
(ii) | payment in full of the structuring fee payable pursuant to Clause 20.1(a); |
(b) | that, on the Drawdown Date but prior to the advance of the Loan, the Agent receives; |
(i) | the documents or evidence described in Part B of Schedule 3 in form and substance satisfactory to the Agent and its lawyers; |
(ii) | payment of any commitment fee payable pursuant to Clause 20.1(b); and |
(iii) | payment of any expenses payable pursuant to Clause 20.2 which are due and payable on the Drawdown Date; |
(c) | that both at the date of the Drawdown Notice and at the Drawdown Date: |
(i) | no Event of Default or Potential Event of Default has occurred or would result from the borrowing of the Advance; |
(ii) | the representations and warranties in Clause 10.1 and those of the Borrower or any Security Party which are set out in the other Finance Documents would be true and not misleading if repeated on each of those dates with reference to the circumstances then existing; |
(iii) | none of the circumstances contemplated by Clause 5.7 has occurred and is continuing; and |
(iv) | there has been no Material Adverse Change; and |
(d) | that, if the ratio set out in Clause 15.1 were applied immediately following the making of the Advance, the Borrower would not be obliged to provide additional security or prepay part of the Loan under that Clause; and |
(e) | that the Agent has received, and found to be acceptable to it, any further opinions, consents, agreements and documents in connection with the Finance Documents which the Agent may, with the authorisation of the Majority Lenders, request by written notice to the Borrower prior to the Drawdown Date. |
9.2 | Waiver of conditions precedent |
10. | REPRESENTATIONS AND WARRANTIES |
10.1 | General |
10.2 | Status |
10.3 | Share capital and ownership |
10.4 | Corporate power |
(a) | to execute the Underlying Documents to which it is a party and to register the Ship in its name under an Approved Flag; |
(b) | to execute the Finance Documents to which the Borrower is a party; and |
(c) | to borrow under this Agreement, to enter into Designated Transactions under the Master Agreement and to make all the payments contemplated by, and to comply with, those Finance Documents to which the Borrower is a party. |
10.5 | Consents in force |
10.6 | Legal validity; effective Security Interests |
(a) | constitute the Borrower's legal, valid and binding obligations enforceable against the Borrower in accordance with their respective terms; and |
(b) | create legal, valid and binding Security Interests enforceable in accordance with their respective terms over all the assets to which they, by their terms, relate, |
10.7 | No third party Security Interests |
(a) | the Borrower will have the right to create all the Security Interests which that Finance Document purports to create; and |
(b) | no third party will have any Security Interest (except for Permitted Security Interests) or any other interest, right or claim over, in or in relation to any asset to which any such Security Interest, by its terms, relates. |
10.8 | No conflicts |
(a) | any law or regulation of any Pertinent Jurisdiction; or |
(b) | the constitutional documents of the Borrower; or |
(c) | any contractual or other obligation or restriction which is binding on the Borrower or any of its assets, |
10.9 | No withholding taxes |
10.10 | No default |
10.11 | Information |
10.12 | No litigation |
10.13 | Validity and completeness of Underlying Documents |
(a) | each of the copies of that Underlying Document delivered to the Agent before the date of this Agreement is a true and complete copy; and |
(b) | no amendments or additions to that Underlying Document have been agreed nor has any party which is the party to that Underlying Document, waived any of their respective rights thereunder. |
10.14 | Compliance with certain undertakings |
10.15 | No rebates etc. |
10.16 | Taxes paid |
10.17 | ISM Code and ISPS Code compliance |
10.18 | No Money laundering |
(a) |
will not, and will procure that no Security Party, to the extent applicable, will, in connection with this Agreement or any of the other Finance Documents, contravene or permit any subsidiary to contravene, any law, official requirement or other regulatory measure or or procedure implemented to combat "money laundering" (as defined in Article 1 of the Directive 2005/60/EC of the European Parliament and of the Council of the European Union of 26 October 2005) and comparable United States Federal and state laws. The Borrower shall further submit any documents and declarations on request, if such documents or declarations are required by any Creditor Party to comply with its domestic money laundering and/or legal identification requirements; and
|
(b) |
confirms that it is the beneficiary within the meaning of the German Anti Money Laundering Act (Gesetz über das Aufspüren von Gewinnen aus schweren Straftaten (Geldwäschegesetz)), acting for its own account and not for or on behalf of any other person for each part of the Loan made or to be made available to it under this Agreement. That is to say, it acts for its own account and not for or on behalf of anyone else.
|
10.19 | No immunity |
10.20 | Choice of law |
10.21 | Pari passu ranking |
10.22 | Best Commercial Interests |
10.23 | Repetition |
(a) | on the date of service of the Drawdown Notice; |
(b) | on the Drawdown Date; and |
(c) | with the exception of Clauses 10.9, 10.10, 10.11 and 10.12, on the first day of each Interest Period and on the date of any Compliance Certificate issued pursuant to Clause 11.20, |
11. | GENERAL UNDERTAKINGS |
11.1 | General |
11.2 | Title; negative pledge and pari passu ranking |
(a) | hold the legal title to, and own the entire legal interest in the Ship, her Insurances and Earnings, free from all Security Interests and other interests and rights of every kind, except for those created by the Finance Documents and the effect of assignments contained in the Finance Documents and except for Permitted Security Interests; and |
(b) | not create or permit to arise any Security Interest (except for Permitted Security Interests) over any other asset, present or future (including, but not limited to, the Borrower's rights against the Swap Bank under the Master Agreement or all or any part of the Borrower's interest in any amount payable to the Borrower by the Swap Bank under the Master Agreement). |
11.3 | No disposal of assets |
(a) | all or a substantial part of its assets, whether by one transaction or a number of transactions, whether related or not; or |
(b) | any debt payable to it or any other right (present, future or contingent right) to receive a payment, including any right to damages or compensation, |
11.4 | No other liabilities or obligations to be incurred |
(a) | liabilities and obligations under the Finance Documents and the Underlying Documents to which it is or, as the case may be, will be a party; and |
(b) | liabilities or obligations reasonably incurred in the normal course of its business of constructing, trading, operating and chartering, maintaining and repairing the Ship (including, without limitation, any shareholder loan subject to the Borrower ensuring on or prior to the date of the first advance of that loan, that the rights of the shareholder which is the provider of the loan are fully subordinated in writing upon such terms and conditions as shall be required by the Agent (acting on the instructions of the Majority Lenders) to the rights of the Creditor Parties under the Finance Documents but excluding any investments, any sale or lease back agreements and any off-balance-sheet obligations). |
11.5 | Information provided to be accurate |
11.6 | Provision of financial statements |
(a) | as soon as possible, but in no event later than 180 days after the end of each Financial Year of the Borrower and the Corporate Guarantor, the unaudited individual management accounts of the Borrower and the consolidated audited annual financial statements of the Group for that Financial Year (commencing with the unaudited management accounts or the audited financial statements (as the case may be) for the Financial Year which ended on 31 December 2015 in respect of the Borrower and on 31 December 2014 in respect of the Corporate Guarantor); and |
(b) | as soon as possible, but in no event later than 90 days after the end of each 6-month period ending on 30 June and 31 December in each Financial Year of the Borrower or, as the case may be, the Corporate Guarantor, the semi-annual individual unaudited management accounts in respect of the Borrower or, in the case of the Corporate Guarantor, the semiannual consolidated unaudited financial statements of the Group, in each case, for that 6-month period (commencing with the management accounts for the 6-month period ending on 30 June 2016 in respect of the Borrower and the financial statements for the period ending on 30 June 2015 in respect of the Corporate Guarantor), duly certified as to their correctness by the chief financial officer of the Corporate Guarantor; and |
(c) | promptly after each written request by the Agent, such further financial, business or other operational information in respect of the Borrower, the Ship, the Corporate Guarantor, the |
11.7 | Form of financial statements |
(a) | be prepared in accordance with all applicable laws and GAAP and, in the case of any audited financial statements, be certified by an Approved Auditor; |
(b) | fairly represent the financial condition of the Borrower or the Group (as the case may be) at the date of those accounts and of their profit for the period to which those accounts relate; and |
(c) | fully disclose or provide for all significant liabilities of the Borrower or the Group (as the case may be). |
11.8 | Shareholder and creditor notices |
11.9 | Consents |
(a) | for the Borrower to perform its obligations under any Finance Document or any Underlying Document to which it is a party; |
(b) | for the validity or enforceability of any Finance Document or any Underlying Document to which it is a party; |
(c) | for the Borrower to continue to own and operate the Ship, |
(a) | at its own cost, do all that it reasonably can to ensure that any Finance Document validly creates the obligations and the Security Interests which it purports to create; and |
(b) | without limiting the generality of paragraph (a), at its own cost, promptly register, file, record or enrol any Finance Document with any court or authority in all Pertinent Jurisdictions, pay any stamp, registration or similar tax in all Pertinent Jurisdictions in respect of any Finance Document, give any notice or take any other step which, in the opinion of the Majority Lenders, is or has become necessary or desirable for any Finance Document to be valid, enforceable or admissible in evidence or to ensure or protect the priority of any Security Interest which it creates. |
11.11 | Notification of litigation |
11.12 | No amendment to Underlying Documents |
11.13 | Principal place of business |
11.14 | Confirmation of no default |
(a) | states that no Event of Default or Potential Event of Default has occurred; or |
(b) | states that no Event of Default or Potential Event of Default has occurred, except for a specified event or matter, of which all material details are given. |
11.15 | Notification of default |
(a) | the occurrence of an Event of Default or a Potential Event of Default; or |
(b) | any matter which indicates that an Event of Default or a Potential Event of Default may have occurred, |
11.16 | Provision of further information |
(a) | to the Borrower, the Ship, the Earnings or the Insurances; or |
(b) | to any other matter relevant to, or to any provision of, a Finance Document, |
11.17 | Provision of copies and translation of documents |
11.18 | " Know your customer " checks |
(a) | the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement ; |
(b) | any change in the status of the Borrower or any Security Party after the date of this Agreement; or |
(c) | a proposed assignment or transfer by a Lender of any of its rights and obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer, |
11.19 | Minimum Liquidity and Additional Minimum Liquidity |
(a) | $600,000 (" Minimum Liquidity ") commencing from the Drawdown Date and at all times thereafter until the irrevocable and unconditional payment of any and all Secured Liabilities; and |
(b) | in addition to the amount required under paragraph (a) of this Clause, an additional amount of $280,000 (" Additional Minimum Liquidity ") commencing from the Drawdown Date and at all times thereafter up to and including the Repayment Date of the 8 th Instalment, at which time, the Additional Minimum Liquidity shall be released to or to the order of the Borrower upon its written request Provided that the 8 th Instalment is paid by the Borrower and no Event of Default or Potential Event of Default has occurred or is continuing or will occur as a result of the release of the relevant Additional Minimum Liquidity amount. |
11.20 | Compliance Certificate |
(a) | The Borrower shall supply to the Agent, together with each set of financial statements delivered pursuant to paragraphs (a) and (b) of Clause 11.6, a Compliance Certificate. |
(b) | Each Compliance Certificate shall be duly signed by the chief financial officer of the Corporate Guarantor and two directors of the Borrower, evidencing (inter alia) the Borrower's compliance (or not, as the case may be) with the provisions of Clause 11.19 and Clause 15.1 and the Corporate Guarantor's compliance with the financial covenants set out in the Corporate Guarantee. |
12. | CORPORATE UNDERTAKINGS |
12.1 | General |
12.2 | Maintenance of status |
12.3 | Negative undertakings |
(a) | change the nature of its business or carry on any type of business other than the ownership, chartering and operation of the Ship; or |
(b) | pay any dividend or make any other form of distribution or effect any form of redemption, purchase or return of share capital if an Event of Default has occurred and is continuing at the relevant time or an Event of Default will result from the payment of a dividend or the making of any other form of distribution; or |
(c) | provide any form of credit or financial assistance to: |
(i) | a person who is directly or indirectly interested in the Borrower's share or loan capital; or |
(ii) | any company in or with which such a person is directly or indirectly interested or connected, |
(d) | open or maintain any account with any bank or financial institution except the Accounts with the Agent and the Security Trustee for the purposes of the Finance Documents; |
(e) | issue, allot or grant any person a right to any shares in its capital or repurchase or reduce its issued share capital; |
(f) | acquire any shares or other securities other than US or UK Treasury bills and certificates of deposit issued by major North American or European banks, or enter into any transaction in a derivative other than any Designated Transactions; or |
(g) | enter into any form of amalgamation, merger or de-merger, acquisition, divesture, split-up or any form of reconstruction or reorganisation. |
13. | INSURANCE |
13.1 | General |
13.2 | Maintenance of obligatory insurances |
(a) | fire and usual marine risks (including hull and machinery and excess risks); |
(b) | war risks (including, without limitation, protection and indemnity war risks with a separate limit not less than hull value); |
(c) | protection and indemnity risks (including, without limitation, protection and indemnity war risks in excess of the amount for war risks (hull) and oil pollution liability risks) in each case in the highest amount available in the international insurance market); and |
(d) | any other risks in respect of which insurance would be obtained by a prudent owner or operator of the Ship and which the Security Trustee (acting on the instructions of the Majority Lenders), having regard to practices, recommendations and other circumstances prevailing at the relevant time, may from time to time reasonably require by notice to the Borrower. |
13.3 | Terms of obligatory insurances |
(a) | in Dollars; |
(b) | in the case of fire and usual marine risks and war risks, on an agreed value basis in an amount equal to at least the higher of (i) an amount which is equal to 120 per cent. of the aggregate of (A) the Loan and (B) the principal amount secured by any equal or prior ranking Security Interest on the Ship and (ii) the Market Value of the Ship; |
(c) | in the case of oil pollution liability risks, for an amount equal to the highest level of cover from time to time available under basic protection and indemnity club entry (with the International Group of Protection and Indemnity Clubs) and the international marine insurance market (currently $1,000,000,000 for any one accident or occurrence); |
(d) | in relation to protection and indemnity risks in respect of the full value and tonnage of the Ship; |
(e) | in relation to war risks insurance, extended to cover piracy and terrorism where excluded under the fire and usual marine risks insurance; |
(f) | on approved terms and conditions; |
(g) | such other risks of whatever nature and howsoever arising in respect of which insurance would be maintained by a prudent owner of a vessel similar to the Ship; and |
(h) | through approved brokers and with approved insurance companies and/or underwriters or, in the case of war risks and protection and indemnity risks, in approved war risks and protection and indemnity risks associations which are members of the International Group of Protection and Indemnity Associations and have a Standard & Poor's rating of at least BBB- or a comparable rating by any other rating agency acceptable to the Security Trustee (acting on the instructions of the Majority Lenders). |
13.4 | Further protections for the Creditor Parties |
(a) | it and any and all third parties who are named assured or co-assured under any obligatory insurance shall assign their interest in any and all obligatory insurances and other Insurances if so required by the Agent; |
(b) | whenever the Security Trustee requires, the obligatory insurances name (or be amended to name) the Security Trustee as additional named assured for its rights and interests, warranted no operational interest and with full waiver of rights of subrogation they may have under any applicable law against the Security Trustee but without the Security Trustee thereby being liable to pay (but having the right to pay) premiums, calls or other assessments in respect of such insurance; |
(c) | the interest of the Security Trustee as assignee and as loss payee shall be duly endorsed on all slips, cover notes, policies, certificates of entry or other instruments of insurance in respect of the obligatory insurances; |
(d) | the obligatory insurances shall name the Security Trustee as sole loss payee with such directions for payment as the Security Trustee may specify; |
(e) | the obligatory insurances shall provide that all payments by or on behalf of the insurers under the obligatory insurances to the Security Trustee shall be made without set-off, counterclaim or deductions or condition whatsoever; |
(f) | the obligatory insurances shall provide that the insurers shall waive, to the fullest extent permitted by English law, their entitlement (if any) (whether by statute, common law, equity, or otherwise) to be subrogated to the rights and remedies of the Security Trustee in respect of any rights or interests (secured or not) held by or available to the Security Trustee in respect of the Secured Liabilities, until the Secured Liabilities shall have been fully repaid and discharged, except that the insurers shall not be restricted by the terms of this paragraph (f) from making personal claims against persons (other than the Borrower or any Creditor Party) in circumstances where the insurers have fully discharged their liabilities and obligations under the relevant obligatory insurances; |
(g) | the obligatory insurances shall provide that the obligatory insurances shall be primary without right of contribution from other insurances effected by the Security Trustee or any other Creditor Party; |
(h) | the obligatory insurances shall provide that the Security Trustee may make proof of loss if the Borrower fails to do so; and |
(i) | the obligatory insurances shall provide that if any obligatory insurance is cancelled, or if any substantial change is made in the coverage which adversely affects the interest of the Security Trustee, or if any obligatory insurance is allowed to lapse for non-payment of premium, such cancellation, charge or lapse shall only be effective against the Security Trustee 14 days (or 7 days in the case of war risks) after receipt by the Security Trustee of prior written notice from the insurers of such cancellation, change or lapse. |
13.5 | Renewal of obligatory insurances |
(a) | at least 14 days before the expiry of any obligatory insurance effected by it: |
(i) | notify the Security Trustee of the brokers, underwriters, insurance companies and any protection and indemnity or war risks association through or with whom the Borrower proposes to renew that obligatory insurance and of the proposed terms and conditions of renewal; and |
(ii) | seek the Security Trustee's approval to the matters referred to in paragraph (i); |
(b) | at least 7 days before the expiry of any obligatory insurance, renew that obligatory insurance in accordance with the Security Trustee's approval pursuant to paragraph (a); and |
(c) | procure that the approved brokers and/or the war risks and protection and indemnity associations with which such a renewal is effected shall promptly after the renewal notify the Security Trustee in writing of the terms and conditions of the renewal. |
13.6 | Copies of policies; letters of undertaking |
(a) | they will have endorsed on each policy, immediately upon issue, a loss payable clause and a notice of assignment complying with the provisions of Clause 13.4; |
(b) | they will hold such policies, and the benefit of such insurances, to the order of the Security Trustee in accordance with the said loss payable clause; |
(c) | they will advise the Security Trustee immediately of any material change to the terms of the obligatory insurances; |
(d) | they will notify the Security Trustee, not less than 14 days before the expiry of the obligatory insurances, in the event of their not having received notice of renewal instructions from the Borrower or its agents and, in the event of their receiving instructions to renew, they will promptly notify the Security Trustee of the terms of the instructions; and |
(e) | they will not set off against any sum recoverable in respect of a claim relating to the Ship under such obligatory insurances any premiums or other amounts due to them or any other person whether in respect of the Ship or otherwise, they waive any lien on the policies, or any sums received under them, which they might have in respect of such premiums or other amounts, and they will not cancel such obligatory insurances by reason of non-payment of such premiums or other amounts, and will arrange for a separate policy to be issued in respect of the Ship forthwith upon being so requested by the Security Trustee. |
13.7 | Copies of certificates of entry; letters of undertaking |
(a) | a certified copy of the certificate of entry for the Ship; |
(b) | a letter or letters of undertaking in such form as may be required by the Security Trustee; |
(c) | where required to be issued under the terms of insurance/indemnity provided by the Borrower's protection and indemnity association, a certified copy of each United States of America voyage quarterly declaration (or other similar document or documents) made by the Borrower in accordance with the requirements of such protections and idemnity association; and |
(d) | a certified copy of each certificate of financial responsibility for pollution by oil or other Environmentally Sensitive Material issued by the relevant certifying authority or, as the case may be, protection and indemnity associations in relation to the Ship (if applicable). |
13.8 | Deposit of original policies |
13.9 | Payment of premiums |
13.10 | Guarantees |
13.11 | Restrictions on employment |
13.12 | Compliance with terms of insurances |
(a) | take all necessary action and comply with all requirements which may from time to time be applicable to the obligatory insurances, and (without limiting the obligation contained in Clause 13.6(c)) ensure that the obligatory insurances are not made subject to any exclusions or qualifications to which the Security Trustee has not given its prior approval; |
(b) | not make any changes relating to the classification or classification society or manager or operator of the Ship approved by the underwriters of the obligatory insurances; |
(c) | make (and promptly supply copies to the Agent) of all quarterly or other voyage declarations which may be required by the protection and indemnity risks association in which the Ship is entered to maintain cover for trading to the United States of America and Exclusive Economic Zone (as defined in the United States Oil Pollution Act 1990 or any other applicable legislation) and, if applicable, shall procure that the Approved Manager complies with this requirement; and |
(d) | not employ the Ship, nor allow it to be employed, otherwise than in conformity with the terms and conditions of the obligatory insurances, without first obtaining the consent of the |
13.13 | Alteration to terms of insurances |
13.14 | Settlement of claims |
13.15 | Provision of copies of communications |
(a) | the approved brokers; |
(b) | the approved protection and indemnity and/or war risks associations; and |
(c) | the approved insurance companies and/or underwriters, which relate directly or indirectly to: |
(i) | the Borrower's obligations relating to the obligatory insurances including, without limitation, all requisite declarations and payments of additional premiums or calls; and |
(ii) | any credit arrangements made between the Borrower and any of the persons referred to in paragraphs (a) or (b) relating wholly or partly to the effecting or maintenance of the obligatory insurances. |
13.16 | Provision of information and further undertakings |
(a) | obtaining or preparing any report from an independent marine insurance broker as to the adequacy of the obligatory insurances effected or proposed to be effected; and/or |
(b) | effecting, maintaining or renewing any such insurances as are referred to in Clause 13.17 or dealing with or considering any matters relating to any such insurances, |
(i) | do all things necessary and provide the Agent and the Security Trustee with all documents and information to enable the Security Trustee to collect or recover any moneys in respect of the Insurances which are payable to the Security Trustee pursuant to the Finance Documents; and |
(ii) | promptly provide the Agent with full information regarding any Major Casualty in consequence whereof the Ship has become or may become a Total Loss and agree |
13.17 | Mortgagee's interest and additional perils insurances |
(a) | a mortgagee's interest insurance providing for the indemnification of the Creditor Parties for any losses under or in connection with any Finance Document (in an amount of up to 120 percent of the Loan) which directly or indirectly result from loss of or damage to the Ship or a liability of the Ship or of the Borrower, being a loss or damage which is prima facie covered by an obligatory insurance but in respect of which there is a non-payment (or reduced payment) by the underwriters by reason of, or on the basis of an allegation concerning: |
(i) | any act or omission on the part of the Borrower, of any operator, charterer, manager or sub-manager of the Ship or of any officer, employee or agent of the Borrower or of any such person, including any breach of warranty or condition or any non-disclosure relating to such obligatory insurance; |
(ii) | any act or omission, whether deliberate, negligent or accidental, or any knowledge or privity of the Borrower, any other person referred to in paragraph (i) above, or of any officer, employee or agent of the Borrower or of such a person, including the casting away or damaging of the Ship and/or the Ship being unseaworthy; and/or |
(iii) | any other matter capable of being insured against under a mortgagee's interest marine insurance policy whether or not similar to the foregoing; and |
(b) | a mortgagee's interest additional perils insurance providing for the indemnification of the Creditor Parties against, among other things, any possible losses or other consequences of any Environmental Claim, including the risk of expropriation, arrest or any form of detention of the Ship, the imposition of any Security Interest over the Ship and/or any other matter capable of being insured against under a mortgagee's interest additional perils policy whether or not similar to the foregoing, and in an amount of up to 110 per cent. of the Loan, |
13.18 | Review of insurance requirements |
13.19 | Modification of insurance requirements |
13.20 | Compliance with mortgagee's instructions |
14. | SHIP COVENANTS |
14.1 | General |
14.2 | Ship's name and registration |
14.3 | Repair and classification |
(a) | consistent with first-class ship ownership and management practice; |
(b) | so as to maintain the highest class free of any overdue recommendations and conditions, with a classification society which is a member of IACS (other than the China Classification Society and the Russian Maritime Registry of Shipping) and acceptable to the Agent; and |
(c) | so as to comply with all laws and regulations applicable to vessels registered at ports in Approved Flag State or to vessels trading to any jurisdiction to which the Ship may trade from time to time, including but not limited to the ISM Code and the ISPS Code, |
14.4 | Classification society undertaking |
(a) | to send to the Security Trustee, following receipt of a written request from the Security Trustee, certified true copies of all original class records and any other related records held by the classification society in relation to the Ship; |
(b) | to allow the Security Trustee (or its agents), at any time and from time to time, to inspect the original class and related records of the Ship at the offices of the classification society and to take copies of them; |
(c) | to notify the Security Trustee immediately in writing if the classification society: |
(i) | receives notification from the Borrower or any person that the Ship's classification society is to be changed; or |
(ii) | becomes aware of any facts or matters which may result in or have resulted in a change, suspension, discontinuance, withdrawal or expiry of the Ship's class under the rules or terms and conditions of the Borrower's or the Ship's membership of the classification society; |
(c) | following receipt of a written request from the Security Trustee: |
(i) | to confirm that the Borrower is not in default of any of its contractual obligations or liabilities to the classification society and, without limiting the foregoing, that it has paid in full all fees or other charges due and payable to the classification society; or |
(ii) | if the Borrower is in default of any of its contractual obligations or liabilities to the classification society, to specify to the Security Trustee in reasonable detail the facts and circumstances of such default, the consequences thereof, and any remedy period agreed or allowed by the classification society. |
14.5 | Modification |
14.6 | Removal of parts |
14.7 | Surveys |
14.8 | Inspection |
14.9 | Prevention of and release from arrest |
(a) | all liabilities which give or may give rise to maritime or possessory liens on or claims enforceable against the Ship, the Earnings or the Insurances; |
(b) | all taxes, dues and other amounts charged in respect of the Ship, the Earnings or the Insurances; and |
(c) | all other outgoings whatsoever in respect of the Ship, the Earnings or the Insurances, |
14.10 | Compliance with laws etc. |
(a) | comply, or procure compliance with the ISM Code, the ISPS Code, all Environmental Laws and all other laws or regulations relating to the Ship, its ownership, operation and management or to the business of the Borrower; |
(b) | not employ the Ship nor allow its employment in any manner contrary to any law or regulation in any relevant jurisdiction including but not limited to the ISM Code and the ISPS Code; and |
(c) | in the event of hostilities in any part of the world (whether war is declared or not), not cause or permit the Ship to enter or trade to any zone which is declared a war zone by any government or by the Ship's war risks insurers unless the prior written consent of the Security Trustee has been given and the Borrower has (at its expense) effected any special, additional or modified insurance cover which the Security Trustee may reasonably require. |
14.11 | Provision of information |
(a) | the Ship, its employment, position and engagements; |
(b) | the Earnings and payments and amounts due to the master and crew of the Ship; |
(c) | any expenses incurred, or likely to be incurred, in connection with the construction, operation, maintenance or repair of the Ship and any payments made in respect of the Ship; |
(d) | any towages and salvages; and |
(e) | its compliance, either Approved Managers' compliance and the compliance of the Ship with the ISM Code and the ISPS Code, |
14.12 | Notification of certain events |
(a) | its entry into any agreement or arrangement for the postponement of any date on which any Earnings are due, the reduction of the amount of any Earnings or otherwise for the release or adverse alteration of any right of the Borrower to any Earnings; |
(b) | its entry into a demise charter in respect of the Ship for any period; |
(c) | its entry into any time or consecutive voyage charter in respect of the Ship for a term which exceeds, or which by virtue of any optional extensions may exceed, 12 months; |
(d) | any casualty which is or is likely to become a Major Casualty; |
(e) | any occurrence as a result of which the Ship has become or is, by the passing of time or otherwise, likely to become a Total Loss; |
(f) | any requirement, condition or recommendation made by any insurer or classification society or by any competent authority which is not immediately complied with in accordance with its terms; |
(g) | any arrest or detention of the Ship, any exercise or purported exercise of any lien on the Ship or its Earnings or any requisition of the Ship for hire; |
(h) | any intended dry docking of the Ship; |
(i) | any Environmental Claim made against the Borrower or in connection with the Ship, or any Environmental Incident; |
(j) | any claim for breach of the ISM Code or the ISPS Code being made against the Borrower, the Approved Managers or otherwise in connection with the Ship; or |
(k) | any other matter, event or incident, actual or threatened, the effect of which will or could lead to the ISM Code or the ISPS Code not being complied with, |
14.13 | Restrictions on chartering, appointment of managers etc. |
(a) | enter into any charter in relation to the Ship under which more than 2 months' hire (or the equivalent) is payable in advance; |
(b) | charter the Ship otherwise than on bona fide arm's length terms at the time when the Ship is fixed; |
(c) | appoint a manager of the Ship other than the Approved Managers or agree to any material alteration to the terms of the Approved Manager's appointment; |
(d) | de-activate or lay up the Ship; or |
(e) | put the Ship into the possession of any person for the purpose of work being done upon it in an amount exceeding or likely to exceed $750,000 (or the equivalent in any other currency) unless that person has first given to the Security Trustee and in terms satisfactory to it a written undertaking not to exercise any lien on the Ship or its Earnings for the cost of such work or for any other reason. |
14.14 | Notice of Mortgage |
14.15 | Sharing of Earnings |
14.16 | ISPS Code |
(a) | procure that the Ship and the company responsible for the Ship's compliance with the ISPS Code comply with the ISPS Code; and |
(b) | maintain for the Ship an ISSC; and |
(c) | notify the Agent immediately in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC. |
14.17 | Charterparty Assignment |
(a) | execute in favour of the Security Trustee a Charterparty Assignment (such Charterparty Assignment to be notified to the relevant charterer and any charter guarantor, and the Borrower shall use its best endeavours to obtain an acknowledgement from that relevant charterer and charter guarantor); and |
(b) | without limiting the generality of the above, if that Assignable Charter is a bareboat charter, procure that the bareboat charterer shall execute in favour of the Security Trustee an assignment of (inter alia) all its rights, title and interest in and to the Insurances in respect of the Ship effected either by the Borrower or by the bareboat charterer and a customary letter of undertaking in favour of the Security Trustee whereby (inter alia) the interests of the bareboat charterer under the bareboat charter are subordinated to the interests of the Security Trustee under the Finance Documents, each in the Agreed Form, |
15. | SECURITY COVER |
15.1 | Minimum required security cover |
(a) | the Market Value of the Ship; plus |
(b) | the net realisable value of any additional security previously provided under this Clause 15; plus, |
15.2 | Provision of additional security; prepayment |
15.3 | Valuation of Ship |
(a) | as at a date not more than 14 days previously; |
(b) | with or without physical inspection of the Ship (as the Agent may require); and |
(c) | on the basis of a sale for prompt delivery for cash on normal arm's length commercial terms as between a willing seller and a willing buyer, free of any existing charter or other contract of employment, |
15.4 | Value of additional vessel security |
15.5 | Valuations binding |
15.6 | Provision of information |
15.7 | Payment of valuation expenses |
15.8 | Frequency of valuations |
16. | PAYMENTS AND CALCULATIONS |
16.1 | Currency and method of payments |
(a) | by not later than 11.00 a.m. (New York City time) on the due date; |
(b) | in same day Dollar funds settled through the New York Clearing House Interbank Payments System (or in such other Dollar funds and/or settled in such other manner as the Agent shall specify as being customary at the time for the settlement of international transactions of the type contemplated by this Agreement); |
(c) | in the case of an amount payable by a Lender to the Agent or by the Borrower to the Agent or any Lender, to the account of the Agent at JP Morgan Chase Bank, New York (SWIFT Code CHASUS33) (Account No. 001-1-331 808 in favour of HSH Nordbank AG, Hamburg, SWIFT Code HSHNDEHH; Reference "Ultra One Shipping LTD") or to such other account with such other bank as the Agent may from time to time notify in writing to the Borrower and the other Creditor Parties; and |
(d) | in the case of an amount payable to the Security Trustee, to such account as it may from time to time notify in writing to the Borrower and the other Creditor Parties. |
16.2 | Payment on non-Business Day |
(a) | the due date shall be extended to the next succeeding Business Day; or |
(b) | if the next succeeding Business Day falls in the next calendar month, the due date shall be brought forward and to the immediately preceeding Business Day, |
16.3 | Basis for calculation of periodic payments |
16.4 |
Distribution of payments to Creditor Parties
Subject to Clauses 16.5, 16.6 and 16.7:
|
(a) | any amount received by the Agent under a Finance Document for distribution or remittance to a Lender, the Swap Bank or the Security Trustee shall be made available by the Agent to that Lender, the Swap Bank or, as the case may be, the Security Trustee by payment, with funds having the same value as the funds received, to such account as the Lender, the Swap Bank or the Security Trustee may have notified to the Agent not less than 5 Business Days previously; and |
(b) | amounts to be applied in satisfying amounts of a particular category which are due to the Lenders and/or the Swap Bank generally shall be distributed by the Agent to each Lender and the Swap Bank pro rata to the amount in that category which is due to it. |
16.5 | Permitted deductions by Agent |
16.6 | Agent only obliged to pay when monies received |
16.7 | Refund to Agent of monies not received |
(a) | refund the sum in full to the Agent; and |
(b) | pay to the Agent the amount (as certified by the Agent) which will indemnify the Agent against any funding or other loss, liability or expense incurred by the Agent as a result of making the sum available before receiving it. |
16.8 | Agent may assume receipt |
16.9 | Creditor Party accounts |
16.10 | Agent's memorandum account |
16.11 | Accounts prima facie evidence |
17. | APPLICATION OF RECEIPTS |
17.1 | Normal order of application |
(a) | FIRST: in or towards satisfaction of any amounts then due and payable under the Finance Documents in the following order and proportions: |
(i) | firstly, in or towards satisfaction pro rata of all amounts then due and payable to the Creditor Parties under the Finance Documents other than those amounts referred to at paragraphs (H) and (Hi) (including, but without limitation, all amounts payable by the Borrower under Clauses 20, 21 and 22 of this Agreement or by the Borrower or any Security Party under any corresponding or similar provision in any other Finance Document); |
(ii) | secondly, in or towards satisfaction pro rata of any and all amounts of interest or default interest payable to the Creditor Parties under the Finance Documents (and, for this purpose, the expression " interest " shall include any net amount which the Borrower shall have become liable to pay or deliver under section 2(e) (Obligations) of the Master Agreement but shall have failed to pay or deliver to the Swap Bank at the time of application or distribution under this Clause 17); and |
(iii) | thirdly, in or towards satisfaction pro rata of the Loan and the Swap Exposure (in the case of the latter, calculated as at the actual Early Termination Date applying to each particular Designated Transaction, or if no such Early Termination Date shall have occurred, calculated as if an Early Termination Date occurred on the date of application or distribution hereunder); |
(b) | SECONDLY: if an Event of Default or Potential Event of Default has occurred, in retention of an amount equal to any amount not then due and payable under any Finance Document but which the Agent, by written notice to the Borrower, the Security Parties and the other Creditor Parties, states in its opinion will either or may become due and payable in the |
(c) | THIRDLY: any surplus shall be paid to the Borrower or to any other person appearing to be entitled to it. |
17.2 | Variation of order of application |
17.3 | Notice of variation of order of application |
17.4 | Appropriation rights overridden |
18. | APPLICATION OF EARNINGS; SWAP PAYMENTS |
18.1 | Payment of Earnings and swap payments |
(a) | it shall maintain the Accounts with the Agent; |
(b) | all Earnings of the Ship are paid to the Earnings Account; |
(c) | all Minimum Liquidity and Additional Minimum Liquidity amounts required pursuant to Clause 11.19 shall be maintained in the Liquidity Account; and |
(d) | all payments by the Swap Bank to the Borrower under each Designated Transaction are paid to the Swap Account and at least 1 day prior to any payment required to be made under a Designated Transaction, ensure that there are sufficient funds in the Swap Account in order to be able to effect such payment. |
18.2 | Monthly retentions |
(a) | one-third of the amount of the relevant Instalment falling due in respect of the Advance under Clause 8.1 on the next Repayment Date; and |
(b) | the relevant fraction of the aggregate amount of interest on the Advance which is payable on the next due date for payment of interest under this Agreement, |
18.3 | Shortfall in Earnings |
18.4 | Application of retentions |
(i) | the Instalment due on that Repayment Date pursuant to Clause 8.1; or |
(ii) | the amount of interest in respect of the Loan payable on that interest payment date, in discharge of the Borrower's liability for that Instalment or that interest. |
18.5 | Interest accrued on the Accounts |
18.6 | Release of accrued interest |
18.7 | Location of Accounts |
(a) | comply with any requirement of the Agent as to the location or re-location of the Accounts (or any of them); and |
(b) | execute any documents which the Agent specifies to create or maintain in favour of the Security Trustee a Security Interest over (and/or rights of set-off, consolidation or other rights in relation to) the Accounts. |
18.8 | Debits for fees, expenses etc. |
18.9 | Borrower's obligations unaffected |
(a) | the liability of the Borrower to make payments of principal and interest on the due dates; or |
(b) | any other liability or obligation of the Borrower or any Security Party under any Finance Document. |
18.10 | Restriction on withdrawal |
19. | EVENTS OF DEFAULT |
19.1 | Events of Default |
(a) | the Borrower or any Security Party fails to pay when due or (if so payable) on demand (or within 3 Business Days of such due date or date of dem and if the failure to pay is due to to technical or administrative error) any sum payable under a Finance Document or under any document relating to a Finance Document; or |
(b) | any breach occurs of Clause 9.2, 11.2, 11.3, 11.19, 12.2, 12.3 or 15.2 or clause 11.14 of financial covenants the Corporate Guarantee; or |
(c) | any breach by the Borrower or any Security Party occurs of any provision of a Finance Document (other than a breach covered by paragraphs (a) or (b)) which is capable of remedy, and such default continues unremedied 15 Business Days after written notice from the Agent requesting action to remedy the same; or |
(d) | (subject to any applicable grace period specified in the Finance Document) any breach by the Borrower or any Security Party occurs of any provision of a Finance Document (other than a breach falling within paragraphs (a), (b) or (c)); or |
(e) | any representation, warranty or statement made or repeated by, or by an officer of, the Borrower or a Security Party in a Finance Document or in the Drawdown Notice or any other notice or document relating to a Finance Document is untrue or misleading when it is made or repeated ; or |
(f) | any of the following occurs in relation to any Financial Indebtedness of a Relevant Person: |
(i) | any Financial Indebtedness of a Relevant Person is not paid when due; or |
(ii) | any Financial Indebtedness of a Relevant Person exceeding in aggregate one million Dollars ($1,000,000) becomes due and payable or capable of being declared due and payable prior to its stated maturity date as a consequence of any event of default; or |
(iii) | a lease, hire purchase agreement or charter creating any Financial Indebtedness of a Relevant Person is terminated by the lessor or owner or becomes capable of being terminated as a consequence of any termination event; or |
(iv) | any overdraft, loan, note issuance, acceptance credit, letter of credit, guarantee, foreign exchange or other facility, or any swap or other derivative contract or transaction, relating to any Financial Indebtedness of a Relevant Person ceases to be available or becomes capable of being terminated as a result of any event of default, or cash cover is required, or becomes capable of being required, in respect of such a facility as a result of any event of default; or |
(v) | any Security Interest securing any Financial Indebtedness of a Relevant Person becomes enforceable; or |
(g) | any of the following occurs in relation to a Relevant Person: |
(i) | a Relevant Person becomes unable to pay its debts as they fall due; or |
(ii) | any assets of a Relevant Person are subject to any form of execution, attachment, arrest, sequestration or distress or any form of freezing order; or |
(iii) | any administrative or other receiver is appointed over any asset of a Relevant Person; or |
(iv) | an administrator is appointed (whether by the court or otherwise) in respect of a Relevant Person; or |
(v) | any formal declaration of bankruptcy or any formal statement to the effect that a Relevant Person is insolvent or likely to become insolvent is made by a Relevant Person or by the directors of a Relevant Person or, in any proceedings, by a lawyer acting for a Relevant Person; or |
(vi) | a provisional liquidator is appointed in respect of a Relevant Person, a winding up order is made in relation to a Relevant Person or a winding up resolution is passed by a Relevant Person; or |
(vii) | a resolution is passed, an administration notice is given or filed, an application or petition to a court is made or presented or any other step is taken by (aa) a Relevant Person, (bb) the members or directors of a Relevant Person, (cc) a holder of Security Interests which together relate to all or substantially all of the assets of a Relevant Person, or (dd) a government minister or public or regulatory authority of a Pertinent Jurisdiction for or with a view to the winding up of that or another Relevant Person or the appointment of a provisional liquidator or administrator in respect of that or another Relevant Person, or that or another Relevant Person ceasing or suspending business operations or payments to creditors, save that this paragraph does not apply to a fully solvent winding up of a Relevant Person other than the Borrower or the Corporate Guarantor which is, or is to be, effected for the purposes of an amalgamation or reconstruction previously approved by the Majority Lenders and effected not later than 3 months after the commencement of the winding up; or |
(viii) | an administration notice is given or filed, an application or petition to a court is made or presented or any other step is taken by a creditor of a Relevant Person (other than a holder of Security Interests which together relate to all or substantially all of the assets of a Relevant Person) for the winding up of a Relevant Person or the appointment of a provisional liquidator or administrator in respect of a Relevant Person in any Pertinent Jurisdiction, unless the proposed winding up, appointment of a provisional liquidator or administration is being contested in good faith, on substantial grounds and not with a view to some other insolvency law procedure being implemented instead and either (aa) the application or petition is dismissed or withdrawn within 30 days of being made or presented, or (bb) within 30 days of the administration notice being given or filed, or the other relevant steps being taken, other action is taken which will ensure that there will be no administration and (in both cases (aa) or (bb)) the Relevant Person will continue to carry on business in the ordinary way and without being the subject of any actual, interim or pending insolvency law procedure; or |
(ix) | a Relevant Person or its directors take any steps (whether by making or presenting an application or petition to a court, or submitting or presenting a document setting out a proposal or proposed terms, or otherwise) with a view to obtaining, in relation to that or another Relevant Person, any form of moratorium, suspension or deferral of payments, reorganisation of debt (or certain debt) or arrangement with all or a substantial proportion (by number or value) of creditors or of any class of them or any such moratorium, suspension or deferral of payments, reorganisation or arrangement is effected by court order, by the filing of documents with a court, by means of a contract or in any other way at all; or |
(x) | any meeting of the members or directors, or of any committee of the board or senior management, of a Relevant Person is held or summoned for the purpose of considering a resolution or proposal to authorise or take any action of a type described in paragraphs (iv) to (ix) or a step preparatory to such action, or (with or without such a meeting) the members, directors or such a committee resolve or agree that such an action or step should be taken or should be taken if certain conditions materialise or fail to materialise; or |
(xi) | in any country other than England, any event occurs, any proceedings are opened or commenced or any step is taken which, in the opinion of the Majority Lenders is similar to any of the foregoing; or |
(h) | the Borrower ceases or suspends carrying on its business or a part of its business which, in the option of the Majority Lenders, is material in the context of this Agreement;or |
(i) | it becomes unlawful in any Pertinent Jurisdiction or impossible: |
(i) | for the Borrower or any Security Party to discharge any liability under a Finance Document or to comply with any other obligation which the Majority Lenders consider material under a Finance Document; or |
(ii) | for the Agent, the Security Trustee or the Lenders or the Swap Bank to exercise or enforce any right under, or to enforce any Security Interest created by, a Finance Document; or |
(j) | any official consent necessary to enable the Borrower to own, operate or charter the Ship or to enable the Borrower or any Security Party to comply with any provision which the Majority Lenders consider material of a Finance Document or any Underlying Document is not granted, expires without being renewed, is revoked or becomes liable to revocation or any condition of such a consent is not fulfilled in accordance with its terms; or |
(k) | it appears to the Majority Lenders that, without their prior consent, a change has occurred or probably has occurred after the date of this Agreement in the direct ownership or control of any of the shares in the Borrower or in the voting rights attaching to any of those shares; or |
(l) | any provision which the Majority Lenders consider material of a Finance Document proves to have been or becomes invaild or unenforceable, or a Security Interest created by a Finance Document proves to have been or becomes invaild or unenforceable or such a Security Interest proves to have ranked after, or loses its priorty to, another Security Interest or any other third party claim or interest which is not a Permitted Security Interest; or |
(m) | the security constituted by a Finance Document is in any way imperilled or in jeopardy; or |
(n) | an Event of Default (as defined in section 14 of a Master Agreement) occurs; or |
(o) | any other adverse event or series of adverse events occur or any other circumstances arise or develop including, without limitation: |
(i) | an adverse change in the financial position, state of affairs or prospects of the Borrower or the Corporate Guarantor or any other Security Party; or |
(ii) | any accident or other event involving the Ship or another vessel owned, chartered or operated by a Relevant Person; or |
(iii) | the threat or commencement of legal or administrative action involving the Borrower, the Ship, either of the Approved Manager or any Security Party; or |
(iv) | the withdrawal of any material license or governmental or regulatory approval in respect of the Ship, the Borrower, an Approved Manager or the Borrower's or Approved Manager's business (unless such withdrawal can be contested with the effect of suspension and is in fact so contested in good faith by the Borrower or the Approved Manager), |
19.2 | Actions following an Event of Default |
(a) | the Agent may, and if so instructed by the Majority Lenders, the Agent shall: |
(i) | serve on the Borrower a written notice stating that all or part of the Commitments and of the other obligations of each Lender to the Borrower under this Agreement are cancelled; and/or |
(ii) | serve on the Borrower a written notice stating that all or part of the Loan together with accrued interest and all other amounts accrued or owing under this Agreement are immediately due and payable or are due and payable on demand; and/or |
(iii) | take any other action which, as a result of the Event of Default or any notice served under paragraph (i) or (ii), the Agent and/or the Lenders are entitled to take under any Finance Document or any applicable law; and/or |
(b) | the Security Trustee may, and if so instructed by the Agent, acting with the authorisation of the Majority Lenders, the Security Trustee shall take any action which, as a result of the Event of Default or any notice served under paragraph (a)(i) or (a)(ii), the Security Trustee, |
19.3 | Termination of Commitments |
19.4 | Acceleration of Loan |
19.5 | Multiple notices; action without notice |
19.6 | Notification of Creditor Parties and Security Parties |
19.7 | Credit Party rights unimpaired |
19.8 | Exclusion of Creditor Party liability |
(a) | for any loss caused by an exercise of rights under, or enforcement of a Security Interest created by, a Finance Document or by any failure or delay to exercise such a right or to enforce such a Security Interest; or |
(b) | as mortgagee in possession or otherwise, for any income or principal amount which might have been produced by or realised from any asset comprised in such a Security Interest or for any reduction (however caused) in the value of such an asset, |
19.9 | Relevant Persons |
19.10 | Interpretation |
19.11 | Position of Swap Bank |
20. | FEES AND EXPENSES |
20.1 | Arrangement, structuring and commitment fees |
(a) | (for the Agent's own account) on the signing date of this Agreement, a non-refundable structurng fee in the amount of $95,000 (representing 0.50 per cent. of the Total Commitments); and |
(b) | a non-refundable commitment fee, at the rate of 0.90 per cent. per annum on the undrawn or uncancelled amount of the Loan, payable quarterly in arrears for distribution among the Lenders pro rata to their Commitments, during the period from (and including) three months from 14 January 2015 (being the date falling 3 months after the Borrower's acceptance of the firm offer letter regarding the Loan) to the period ending on the earlier of (i) the Drawdown Date and (ii) the last day of the Availability Period (and on the last day of such period). |
20.2 | Costs of negotiation, preparation etc. |
20.3 | Costs of variations, amendments, enforcement etc. |
(a) | any amendment or supplement (or any proposal for such an amendment or supplement) requested (or, in the case of a proposal, made) by or on behalf of the Borrower and relating to a Finance Document or any other Pertinent Document; |
(b) | any consent, waiver or suspension of rights by the Lenders, the Swap Bank, the Majority Lenders or the Creditor Party concerned or any proposal for any of the foregoing requested (or, in the case of a proposal, made) by or on behalf of the Borrower under or in connection with a Finance Document or any other Pertinent Document; |
(c) | the valuation of any security provided or offered under and pursuant to Clause 15 or any other matter relating to such security; or |
(d) | any step taken by the Lender concerned or the Swap Bank with a view to the preservation, protection, exercise or enforcement of any rights or Securty Interest created by a Finance Document or for any similar purpose including, without limitation, any proceedings to recover or retain proceeds of enforcement or any other proceedings following enforcement proceedings until the date all outstandling indebtedness to the Creditor Parties under the Finance Documents and any other Pertinent Document is repaid in full. |
20.4 | Documentary taxes |
20.5 | Certification of amounts |
21. | INDEMNITIES |
21.1 | Indemnities regarding borrowing and repayment of Loan |
(a) | the Advance not being borrowed on the date specified in the Drawdown Notice for any reason other than a default by the Lender claiming the indemnity after the Drawdown Notice has been served in accordance with the provisions of this Agreement; |
(b) | the receipt or recovery of all or any part of the Loan or an overdue sum otherwise than on the last day of an Interest Period or other relevant period; |
(c) | any failure (for whatever reason) by the Borrower to make payment of any amount due under a Finance Document on the due date or, if so payable, following demand (after giving credit for any default interest paid by the Borrower on the amount concerned under Clause 7) including but not limited to any costs and expenses of enforcing any Security Interests created by the Finance Documents and any claims, liabilities and losses which may be brought against, or incurred by, a Creditor Party when enforcing any Security Interests created by the Finance Documents; and |
(d) | the occurrence and/or continuance of an Event of Default or a Potential Event of Default and/or the acceleration of repayment of the Loan under Clause 19 (including without |
21.2 | Break Costs |
(a) | the Agent shall promptly notify the Borrower of a notice it receives from a Notifying Lender under this Clause 21.2; |
(b) | the Borrower shall, within 5 Business Days of the Agent's demand, pay to the Agent for the account of the Notifying Lender the amount of such Break Costs; and |
(c) | the Notifying Lender shall, as soon as reasonably practicable, following a request by the Borrower, provide a certificate confirming the amount of the Notifying Lender's Break Costs for the Interest Period in which they accrue, such certificate to be, in the absence of manifest error, conclusive and binding on the Borrower. |
(i) | the interest which the Notifying Lender, should have received in respect of the sum received or recovered from the date of receipt or recovery of such Payment to the last day of the then current Interest Period applicable to the sum received or recovered had such Payment been made on the last day of such Interest Period; |
(ii) | the amount which the Notifying Lender, would be able to obtain by placing an amount equal to such Payment on deposit with a leading bank in the London Interbank Market for a period commencing on the Business Day following receipt or recovery of such Payment (as the case may be) and ending on the last day of the then current Interest Period applicable to the sum received or recovered. |
21.3 | Other breakage costs |
21.4 | Miscellaneous indemnities |
(a) | any action taken, or omitted or neglected to be taken, under or in connection with any Finance Document by the Agent, the Security Trustee or any other Creditor Party or by any receiver appointed under a Finance Document; |
(b) | investigating any event which the Creditor Party concerned reasonably believes constitutes an Event of Default or Potential Event of Default; |
(c) | acting or relying on any notice, request or instruction which the Creditor Party concerned reasonably believes to be genuine, correct and appropriately authorised; or |
(d) | any other Pertinent Matter, |
21.5 | Environmental Indemnity |
21.6 | Currency indemnity |
(a) | making, filing or lodging any claim or proof against the Borrower or any Security Party, whether in its liquidation, any arrangement involving it or otherwise; or |
(b) | obtaining an order, judgment or award from any court or other tribunal in relation to any litigation or arbitration proceedings; or |
(c) | enforcing any such order, judgment or award, |
21.7 | Application to Master Agreement |
21.8 | Certification of amounts |
21.9 | Sums deemed due to a Lender |
22. | NO SET-OFF OR TAX DEDUCTION |
22.1 | No deductions |
(a) | without any form of set-off, counter-claim, cross-claim or condition; and |
(b) | free and clear of any tax deduction except a tax deduction which the Borrower is required by law to make. |
22.2 | Grossing-up for taxes |
(a) | the Borrower shall notify the Agent as soon as it becomes aware of the requirement; |
(b) | the amount due in respect of the payment shall be increased by the amount necessary to ensure that, after the making of such tax deduction, each Creditor Party receives on the due date for such payment (and retains free from any liability relating to the tax deduction) a net amount which is equal to the full amount which it would have received had no such tax deduction been required to be made; and |
(c) | the Borrower shall pay the full amount of the tax required to be deducted to the appropriate taxation authority promptly in accordance with the relevant law, regulation or regulatory requirement, and in any event before any fine or penalty arises. |
22.3 | Indemnity and evidence of payment of taxes |
(a) | a Tax Credit is attributable to an increased payment of which that Tax Payment forms part, to that Tax Payment or to a Tax Deduction in consequence of which that Tax Payment was received; and |
(b) | that Creditor Party has obtained, utilised and retained that Tax Credit, |
22.4 | Exclusion of tax on overall net income |
22.5 | Application to Master Agreement |
23. | ILLEGALITY, ETC. |
23.1 | Illegality |
(a) | unlawful or prohibited as a result of the introduction of a new law, an amendment to an existing law or a change in the manner in which an exisiting law is or will be interpreted or applied; or |
(b) | contrary to, or inconsistent with, any regulation, |
23.2 | Notification of illegality |
23.3 | Prepayment; termination of Commitment |
24. | INCREASED COSTS |
24.1 | Increased costs |
(a) | the introduction or alteration after the date of this Agreement of a law or an alteration after the date of this Agreement in the manner in which a law is interpreted or applied (disregarding any effect which relates to the application to payments under this Agreement of a tax on the Lender's overall net income); or |
(b) | complying with any regulation (including any which relates to capital adequacy or liquidity controls or which affects the manner in which the Notifying Lender allocates capital resources to its obligations under this Agreement) which is introduced, or altered, or the interpretation or application of which is altered, after the date of this Agreement; or |
(c) | the implementation or application of or compliance with the "International Convergence of Capital Measurement and Capital Standards, a Revised Framework" published by the Basel Committee on Banking Supervision in June 2004 in the form existing on the date of this Agreement (the " Basel II Accord ") or any other law or regulation implementing the Basel II Accord or any of the approaches provided for and allowed to be used by banks under or in connection with the Basel II Accord, in each case when compared to the cost of complying with such regulations as determined by the Agent (or parent company of it) on the date of this Agreement (whether such implementation, application or compliance is by a government, regulator, supervisory authority, the Notifying Lender or its holding company); or |
(d) | the implementation or application of or compliance with Basel III or any law or regulation which implements or applies Basel III (regardless of the date on which it is enacted, adopted or issued and regardless of whether any such implementation, application or compliance is by a government, regulator, the Notifying Lender or any of its affiliates) is that the Notifying Lender (or a parent company of it), |
24.2 | Meaning of "increased cost" |
(a) | an additional or increased cost incurred as a result of, or in connection with, the Notifying Lender having entered into, or being a party to, this Agreement or a Transfer Certificate, of funding or maintaining its Commitment or Contribution or performing obligations under this Agreement, or of having outstanding all or any part of its Contribution or other unpaid sums; |
(b) | a reduction in the amount of any payment to the Notifying Lender under this Agreement or in the effective return which such a payment represents to the Notifying Lender or on its capital; |
(c) | an additional or increased cost of funding all or maintaining all or any of the advances comprised in a class of advances formed by or including the Notifying Lender's Contribution or (as the case may require) the proportion of that cost attributable to the Contribution; or |
(d) | a liability to make a payment, or a return foregone, which is calculated by reference to any amounts received or receivable by the Notifying Lender under this Agreement, |
24.3 | Notification to Borrower of claim for increased costs |
24.4 | Payment of increased costs |
24.5 | Notice of prepayment |
24.6 | Prepayment; termination of Commitment |
(a) | on the date on which the Agent serves that notice, the Commitment of the Notifying Lender shall be cancelled; and |
(b) | on the date specified in its notice of intended prepayment, the Borrower shall prepay (without premium or penalty) the Notifying Lender's Contribution, together with accrued interest thereon at the applicable rate plus the Margin and the Mandatory Cost (if any). |
24.7 | Application of prepayment |
25. | SET-OFF |
25.1 | Application of credit balances |
(a) | apply any balance (whether or not then due) which at any time stands to the credit of any account in the name of the Borrower at any office in any country of that Creditor Party in or towards satisfaction of any sum then due from the Borrower to that Creditor Party under any of the Finance Documents; and |
(b) | for that purpose: |
(i) | break, or alter the maturity of, all or any part of a deposit of the Borrower; |
(ii) | convert or translate all or any part of a deposit or other credit balance into Dollars; and |
(iii) | enter into any other transaction or make any entry with regard to the credit balance which the Creditor Party concerned considers appropriate. |
25.2 | Existing rights unaffected |
25.3 | Sums deemed due to a Lender |
25.4 | No Security Interest |
26. | TRANSFERS AND CHANGES IN LENDING OFFICES |
26.1 | Transfer by Borrower |
26.2 | Transfer by a Lender |
(a) | its rights in respect of all or part of its Contribution; or |
(b) | its obligations in respect of all or part of its Commitment; or |
(c) | a combination of (a) and (b); or |
(d) | all or part of its credit risk under this Agreement and the other Finance Documents, |
26.3 | Transfer Certificate, delivery and notification |
(a) | sign the Transfer Certificate on behalf of itself, the Borrower, the Security Parties, the Security Trustee and each of the other Lenders and the Swap Bank; |
(b) | on behalf of the Transferee Lender, send to the Borrower and each Security Party letters or faxes notifying them of the Transfer Certificate and attaching a copy of it; and |
(c) | send to the Transferee Lender copies of the letters or faxes sent under paragraph (b) above. |
26.4 | Effective Date of Transfer Certificate |
26.5 | No transfer without Transfer Certificate |
26.6 | Lender re-organisation; waiver of Transfer Certificate |
26.7 | Effect of Transfer Certificate |
(a) | to the extent specified in the Transfer Certificate, all rights and interests (present, future or contingent) which the Transferor Lender has under or by virtue of the Finance Documents (other than the Master Agreement) are assigned to the Transferee Lender absolutely, free of any defects in the Transferor Lender title and of any rights or equities which the Borrower or any Security Party had against the Transferor Lender; |
(b) | the Transferor Lender's Commitment is discharged to the extent specified in the Transfer Certificate; |
(c) | the Transferee Lender becomes a Lender with the Contribution previously held by the Transferor Lender and a Commitment of an amount specified in the Transfer Certificate; |
(d) | the Transferee Lender becomes bound by all the provisions of the Finance Documents (other than the Master Agreement) which are applicable to the Lenders generally, including those about pro-rata sharing and the exclusion of liability on the part of, and the indemnification of, the Agent and the Security Trustee and, to the extent that the Transferee Lender becomes bound by those provisions (other than those relating to exclusion of liability), the Transferor Lender ceases to be bound by them; |
(e) | any part of the Loan which the Transferee Lender advances after the Transfer Certificate's effective date ranks in point of priority and security in the same way as it would have ranked had it been advanced by the transferor, assuming that any defects in the transferor's title and any rights or equities of the Borrower or any Security Party against the Transferor Lender had not existed; |
(f) | the Transferee Lender becomes entitled to all the rights under the Finance Documents (other than the Master Agreement) which are applicable to the Lenders generally, including but not limited to those relating to the Majority Lenders and those under Clause 5.7 and Clause 20, and to the extent that the Transferee Lender becomes entitled to such rights, the Transferor Lender ceases to be entitled to them; and |
(g) | in respect of any breach of a warranty, undertaking, condition or other provision of a Finance Document or any misrepresentation made in or in connection with a Finance Document (other than the Master Agreement), the Transferee Lender shall be entitled to recover damages by reference to the loss incurred by it as a result of the breach or misrepresentation, irrespective of whether the original Lender would have incurred a loss of that kind or amount. |
26.8 | Maintenance of register of Lenders |
26.9 | Reliance on register of Lenders |
26.10 | Authorisation of Agent to sign Transfer Certificates |
26.11 | Registration fee |
26.12 | Sub-participation; subrogation assignment |
26.13 | Sub-division, split, modification or re-tranching |
26.14 | Disclosure of information |
(a) | provide the Creditor Parties (or any of them) with all information deemed, reasonably, necessary by the Creditor Parties (or any of them) for the purposes of any transfer, syndication or sub-participation to be effected pursuant to this Clause 26; and |
(b) | procure that the representatives of the Borrower, the Corporate Guarantor or any other Security Party, are available to participate in any meeting with any Transferee Lender or any rating agency at such times and places as the Creditor Parties may reasonably request following prior notice (to be served reasonably in advance) to the Borrower, the Corporate Guarantor or that Security Party. |
26.15 | Change of lending office |
(a) | the date on which the Agent receives the notice; and |
(b) | the date, if any, specified in the notice as the date on which the change will come into effect. |
26.16 | Notification |
26.17 | Security over Lenders' rights |
(a) | any charge, assignment or other Security Interest to secure obligations to a federal reserve or central bank; and |
(b) | in the case of any Lender which is a fund, any charge, assignment or other Security Interest granted to any holders (or trustee or representatives of holders) of obligations owed, or securities issued, by that Lender as security for those obligations or securities; |
(i) | release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or Security Interest for the Lender as a party to any of the Finance Documents; or |
(ii) | require any payments to be made by the Borrower or any Security Party or grant to any person any more extensive rights than those required to be made or granted to the relevant Lender under the Finance Documents. |
26.18 | Replacement of a Reference Bank |
27. | VARIATIONS AND WAIVERS |
27.1 | Required consents |
(a) | Subject to Clause 27.2 (Exceptions) any term of the Finance Documents may be amended or waived only with the consent of the Majority Lenders and the Borrower and any such amendment or waiver will be binding on all Creditor Parties and the Borrower. |
(b) | Any instructions given by the Majority Lenders will be binding on all the Creditor Parties. |
(c) | The Agent may effect, on behalf of any Creditor Party, any amendment or waiver permitted by this Clause. |
27.2 | Exceptions |
(a) | An amendment or waiver that has the effect of changing or which relates to: |
(i) | the definition of "Majority Lenders" or "Finance Documents" in Clause 1.1 (Definitions); |
(ii) | an extension to the date of payment of any amount under the Finance Documents; |
(iii) | a reduction in the Margin or a reduction in the amount of any payment of principal, interest fees, commission or other amount payable under any of the Finance Documents; |
(iv) | an increase in or an extension of any Lender's Commitment; |
(v) | any provision which expressly requires the consent of all the Lenders; or |
(vi) | Clause 3 (Position of the Lenders and Swap Banks), Clause 11.5 (Information provided to be accurate), 11.6 (Provision of financial statements), 11.7 (Form of financial statements), Clause 11.16 (Provision of Further Information), Clause 26 (Transfers and Changes in Lending Offices) or this Clause 27.2; |
(vii) | any release of any Security Interest, guarantee, indemnities or subordination arrangement created by any Finance Document; |
(viii) | any change of the currency in which the Loan is provided or any amount is payable under any of the Finance Documents; |
(ix) | an extension of the Availability Period; |
(x) | change clauses 16.4 (Distribution of payment to Creditor Parties) and 22 (Grossing-up), |
(b) | An amendment or waiver which relates to the rights or obligations of the Agent, the Arranger or the Security Trustee may not be effected without the consent of the Agent, the Arranger or the Security Trustee, as the case may be. |
27.3 | Exclusion of other or implied variations |
(a) | a provision of this Agreement or another Finance Document; or |
(b) | an Event of Default; or |
(c) | a breach by the Borrower or a Security Party of an obligation under a Finance Document or the general law; or |
(d) | any right or remedy conferred by any Finance Document or by the general law, |
27.4 | Deemed consent |
28. | NOTICES |
28.1 | General |
28.2 | Addresses for communications. A notice by letter or fax shall be sent: |
(a)
|
to the Borrower:
|
4 Messogiou & Evropis Street
151 24, Maroussi Greece Fax No: +30 211 1804097 |
(b)
|
to a Lender:
|
At the address below its name in Schedule 1 or (as the case may require) in the relevant Transfer
|
Certificate.
|
||
(c)
|
to the Agent and Security Trustee:
|
HSH Nordbank AG
CRM Shipping Europe & Offshore Gerhart-Hauptm ann-Platz 50 20095 Ha,birg Germany Fax No : +49 40 3333 34118 |
(d)
|
to the Swap Bank:
|
Martensdamm 6
D-24103 Kiel Germany Fax No : +49 40 3333 34086 |
28.3 | Effective date of notices |
(a) | a notice which is delivered personally or posted shall be deemed to be served, and shall take effect, at the time when it is delivered; and |
(b) | a notice which is sent by fax shall be deemed to be served, and shall take effect, 2 hours after its transmission is completed. |
28.4 | Service outside business hours |
(a) | on a day which is not a business day in the place of receipt; or |
(b) | on such a business day, but after 5 p.m. local time, |
28.5 | Illegible notices |
28.6 | Valid notices |
(a) | the failure to serve it in accordance with the requirements of this Agreement or other Finance Document, as the case may be, has not caused any party to suffer any significant loss or prejudice; or |
(b) | in the case of incorrect and/or incomplete contents, it should have been reasonably clear to the party on which the notice wsa served what the correct or missing particulars should have been. |
28.7 | Electronic communication |
(a) | agree that, unless and until notified to the contrary, this is to be an accepted form of communication; |
(b) | notify each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means; and |
(c) | notify each other of any change to their respective addresses or any other such information supplied to them. |
28.8 | English language |
28.9 | Meaning of "notice" |
29. | SUPPLEMENTAL |
29.1 | Rights cumulative, non-exclusive |
(a) | cumulative; |
(b) | may be exercised as often as appears expedient; and |
(c) | shall not, unless a Finance Document explicitly and specifically states so, be taken to exclude or limit any right or remedy conferred by any law. |
29.2 | Severability of provisions |
29.3 | Counterparts |
29.4 | Third party rights |
29.5 | Benefit and binding effect |
30. | LAW AND JURISDICTION |
30.1 | English law |
30.2 | Exclusive English jurisdiction |
30.3 | Choice of forum for the exclusive benefit of the Creditor Parties |
(a) | to commence proceedings in relation to any Dispute in the courts of any country other than England and which have or claim jurisdiction to that Disputes; and |
(b) | to commence such proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in England or without commencing proceedings in England. |
30.4 | Process agent |
30.5 | Creditor Party rights unaffected |
30.6 | Meaning of "proceedings" and "Dispute" |
Lender
|
Lending Office
|
Commitment
( Dollars ) |
HSH Nordbank AG
|
Gerhart-Hauptmann-Platz 50
20095 Hamburg Germany |
19,000,000
|
To:
|
HSH Nordbank AG
Gerhart-Hauptmann-Platz 50
20095 Hamburg
Germany
Attention: [Loans Administration]
|
[
·
] 2015
|
2 | We refer to the loan agreement (the " Loan Agreement ") dated [ · ] 2015 and made between ourselves, as Borrower, the Lenders referred to therein, and yourselves as Agent, Mandated Lead Arranger, as Security Trustee and as Swap Bank in connection with a facility of up to US$19,000,000. Terms defined in the Loan Agreement have their defined meanings when used in this Drawdown Notice. |
(a) | Amount of Advance: US$[ · ]; |
(b) | Drawdown Date: [ · ]; |
(c) | Duration of the first Interest Period shall be [ · ] months; and |
(d) | Payment instructions: account in our name and numbered [ · ] with [ · ] of [ · ]. |
(a) | the representations and warranties in Clause 10 of the Loan Agreement would remain true and not misleading if repeated on the date of this notice with reference to the circumstances now existing; and |
(b) | no Event of Default or Potential Event of Default has occurred or will result from the borrowing of the Advance. |
1 | A duly executed original of: |
(a) | this Agreement; |
(b) | the Master Agreement; |
(c) | the Master Agreement Assignment; |
(d) | the Corporate Guarantee; |
(e) | the Agency and Trust Agreement; and |
(f) | the Account Pledges. |
2 | Copies of the certificate of incorporation and constitutional documents of the Borrower, the Corporate Guarantor and any other Security Party and any company registration documents in respect of the Borrower, the Corporate Guarantor or, any other Security Party (including, without limitation, any corporate register excerpts, if applicable) required by the Agent and a list of all members of the Group. |
3 | Copies of resolutions of the shareholders of the Borrower and of the directors of the Borrower and each Security Party authorising the execution of each of the Finance Documents to which the Borrower or that Security Party is a party and, in the case of the Borrower, authorising named officers to give the Drawdown Notice and other notices under this Agreement. |
4 | The original of any power of attorney under which any Finance Document is executed on behalf of the Borrower, the Corporate Guarantor or any other Security Party. |
5 | Copies of any consents which the Borrower, the Corporate Guarantor or any other Security Party requires to enter into, or make any payment under, any Finance Document. |
6 | The originals of any mandates or other documents required in connection with the opening or operation of the Accounts. |
7 | Documentary evidence that the agent for service of process named in Clause 31 has accepted its appointment. |
8 | Any documents required by the Agent in respect of the Borrower, the Corporate Guarantor and any other Security Party to satisfy the Lenders' "know your customer" requirements. |
9 | Favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of the Republic of Liberia, the Republic of the Marshall Islands and such other relevant jurisdictions as the Agent may require. |
10 | If the Agent so requires, in respect of any of the documents referred to above, a certified English translation prepared by a translator approved by the Agent. |
1 | A duly executed original of the Mortgage, the General Assignment and any Charterparty Assignment relating to any Assignable Charter (and of each document to be delivered by each of them) each in respect of the Ship. |
2 | Documentary evidence that on the Delivery Date: |
(a) | the Ship has been unconditionally delivered by the Sellers accepted by, the Borrower under the Building Contract, and the Contract Price payable thereunder (in addition to the part to be financed by the Advance) has been duly paid in full (together with a copy of each of the documents delivered by the Sellers to the Borrower under the Building Contract (including, but not limited to the bill of sale, the commercial invoice and the protocol of delivery and acceptance)); |
(b) | the Ship is definitively and permanently registered in the name of the Borrower under an Approved Flag in accordance with the laws of the applicable Approved Flag State; |
(c) | the Ship is in the absolute and unencumbered ownership of the Borrower save as contemplated by the Finance Documents; |
(d) | the Ship maintains the class specified in Clause 14.3(b) with a first class classification society which is a member of IACS as the Agent may approve free of all overdue recommendations and conditions of such classification society; |
(e) | the Mortgage relating to the Ship has been duly registered or recorded against the Ship as a valid first preferred or, as the case may be, priority mortgage in accordance with the laws of the applicable Approved Flag State; |
(f) | the Ship is insured in accordance with the provisions of this Agreement and all requirements therein in respect of insurances have been complied with; and |
(g) | if the Ship is subject to an Assignable Charter, the Ship is delivered to the relevant charterer in accordance with the terms of that Assignable Charter. |
3 | Documents establishing that the Ship will, as from the Drawdown Date, be managed by the Approved Managers on terms acceptable to the Lenders, together with: |
(a) | the Approved Managers' Undertaking relative thereto; and |
(b) | copies of the Approved Managers' Document of Compliance and evidence of issuance on the Delivery Date and of the Ship's Safety Management Certificate (together with any other details of the applicable safety management system which the Agent requires). |
4 | The Initial Market Value of the Ship prepared pursuant to Clause 15.3, stated to be for the purposes of this Agreement, which shows a value of the Ship in an amount which will be sufficient to satisfy the Borrower's obligations under Clause 15.1. |
5 | A certified true copy of any Assignable Charter applicable to the Ship duly executed by the parties thereto and a certified true copy of the Building Contract. |
6 | Favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of the Approved Flag State and such other relevant jurisdictions as the Agent may require. |
7 | A favourable opinion from an independent insurance consultant acceptable to the Agent on such matters relating to the insurances for the Ship as the Agent may reasonably require. |
8 | Evidence satisfactory to the Agent that the Minimum Liquidity and Additional Minimum Liquidity amounts are each standing to the credit of the Liquidity Account pursuant to Clause 11.19. |
9 | If the Agent so requires, in respect of any of the documents referred to above, a certified English translation prepared by a translator approved by the Agent. |
10 | Evidence satisfactory to the Agent of payment of all fees due and payable in accordance with Clause 9 of this Agreement. |
1 | The Mandatory Cost is an addition to the interest rate to compensate Lenders for the cost of compliance with (a) the requirements of the Financial Services Authority (or any other authority which replaces all or any of its functions) or (b) the requirements of the European Central Bank. |
2 | On the first day of each Interest Period (or as soon as possible thereafter) the Agent shall calculate, as a percentage rate, a rate (the " Additional Cost Rate ") for each Lender, in accordance with the paragraphs set out below. The Mandatory Cost will be calculated by the Agent as a weighted average of the Lenders' Additional Cost Rates (weighted in proportion to the percentage participation of each Lender in the Advance) and will be expressed as a percentage rate per annum. |
3 | The Additional Cost Rate for any Lender lending from a lending office in a Participating Member State will be the percentage notified by that Lender to the Agent. This percentage will be certified by that Lender in its notice to the Agent to be its reasonable determination of the cost (expressed as a percentage of that Lender's participation in all Advances made from that lending office) of complying with the minimum reserve requirements of the European Central Bank in respect of loans made from that lending office. |
4
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The Additional Cost Rate for any Lender lending from a lending office in the United Kingdom will be calculated by the Agent as follows: |
E x
0.01
|
per cent. per annum
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||
300
|
E | is designed to compensate Lenders for amounts payable under the Fees Rules and is calculated by the Agent as being the average of the most recent rates of charge supplied by the Reference Banks to the Agent pursuant to paragraph 6 below and expressed in pounds per £1,000,000. |
5 | For the purposes of this Schedule: |
(a) | " Eligible Liabilities " and " Special Deposits " have the meanings given to them from time to time under or pursuant to the Bank of England Act 1998 or (as may be appropriate) by the Bank of England; |
(b) | " Fees Rules " means the rules on periodic fees contained in the FSA Supervision Manual or such other law or regulation as may be in force from time to time in respect of the payment of fees for the acceptance of deposits; |
(c) | " Fee Tariffs " means the fee tariffs specified in the Fees Rules under the activity group A.1 Deposit acceptors (ignoring any minimum fee or zero rated fee required pursuant to the Fees Rules but taking into account any applicable discount rate); |
(d) | " Participating Member State " means any member state of the European Union that adopts or has adopted the euro as its lawful currency in accordance with legislation of the European Union relating to European Monetary Union; and |
( e ) | " Tariff Base " has the meaning given to it in, and will be calculated in accordance with, the Fees Rules. |
6 | If requested by the Agent, the Reference Banks shall, as soon as practicable after publication by the Financial Services Authority, supply to the Agent, the rate of charge payable by the Reference Banks to the Financial Services Authority pursuant to the Fees Rules in respect of the relevant financial year of the Financial Services Authority (calculated for this purpose by the Reference Banks as being the average of the Fee Tariffs applicable to the Reference Banks for that financial year) and expressed in pounds per £1,000,000 of the Tariff Base of the Reference Banks. |
7 | Each Lender shall supply any information required by the Agent for the purpose of calculating its Additional Cost Rate. In particular, but without limitation, each Lender shall supply the following information in writing on or prior to the date on which it becomes a Lender: |
(a) | the jurisdiction of its lending office; and |
(b) | any other information that the Agent may reasonably require for such purpose. |
8 | The rates of charge of the Reference Banks for the purpose of E above shall be determined by the Agent based upon the information supplied to it pursuant to paragraph 6 above and on the assumption that, unless a Lender notifies the Agent to the contrary, each Lender's obligations in relation to cash ratio deposits and special Deposits are the same as those of a typical bank from its jurisdiction of incorporation with a lending office in the same jurisdiction as its lending office. |
9 | The Agent shall have no liability to any person if such determination results in an Additional Cost Rate which over or under compensates any Lender and shall be entitled to assume that the information provided by any Lender or the Reference Banks pursuant to paragraphs 3, 6 and 7 above is true and correct in all respects. |
10 | The Agent shall distribute the additional amounts received as a result of the Mandatory Cost to the Lenders on the basis of the Additional Cost Rate for each Lender based on the information provided by each Lender and the Reference Banks pursuant to paragraphs 3, 6 and 7 above. |
11 | Any determination by the Agent pursuant to this Schedule in relation to a formula, the Mandatory Cost, an Additional Cost Rate or any amount payable to a Lender shall, in the absence of manifest error, be conclusive and binding on all parties. |
12 | The Agent may from time to time, after consultation with the Borrower and the Lenders, determine and notify to all parties any amendments which are required to be made to this Schedule in order to comply with any change in law, regulation or any requirements from time to time imposed by the Financial Services Authority or the European Central Bank (or, in any case, any other authority which replaces all or any of its functions) and any such determination shall, in the absence of manifest error, be conclusive and binding on all parties. |
To:
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Ultra One Shipping Ltd
[ · ] |
-and-
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HSH Nordbank AG
Gerhart-Hauptmann-Platz 50 20095 Hamburg Germany Attention: [Loans Administration] |
1 | the Loan Agreement; |
2 | the Master Agreement dated as of [ · ] made between yourselves and the Swap Bank; and |
3 | a Confirmation delivered pursuant to the said Master Agreement dated [ · ] and addressed by the Swap Bank to yourselves. |
To: | HSH Nordbank AG for itself and for and on behalf of the Borrower, each Security Party, the Security Trustee, each Lender and the Swap Bank, as defined in the Loan Agreement referred to below. |
1 | This Certificate relates to a Loan Agreement (the " Loan Agreement ") dated [ · ] 2015 and made between (1) Ultra One Shipping Ltd (the " Borrower ") as Borrower, (2) the banks and financial institutions named therein as Lenders, (3) HSH Nordbank AG as Swap Bank, (4) HSH Nordbank AG as Agent (5) HSH Nordbank AG as Mandated lead Arranger and (6) HSH Nordbank AG as Security Trustee for a loan facility of up to US$19,000,000. |
2 | In this Certificate, terms defined in the Loan Agreement shall, unless the contrary intention appears, have the same meanings and: |
3 | The effective date of this Certificate is [ · ] Provided that this Certificate shall not come into effect unless it is signed by the Agent on or before that date. |
4 | The Transferor assigns to the Transferee absolutely all rights and interests (present, future or contingent) which the Transferor has as Lender under or by virtue of the Loan Agreement and every other Finance Document (other than the Master Agreement) in relation to [ · ] per cent. of its Contribution, which percentage represents $[ · ]. |
5 | By virtue of this Certificate and Clause 26 of the Loan Agreement, the Transferor is discharged [entirely from its Commitment which amounts to $[ · ]] [from [ · ] per cent. of its Commitment, which percentage represents $[ · ]] and the Transferee acquires a Commitment of $[ · ].] |
6 | The Transferee undertakes with the Transferor and each of the Relevant Parties that the Transferee will observe and perform all the obligations under the Finance Documents (other than the Master Agreement) which Clause 26 of the Loan Agreement provides will become binding on it upon this Certificate taking effect. |
7 | The Agent, at the request of the Transferee (which request is hereby made) accepts, for the Agent itself and for and on behalf of every other Relevant Party, this Certificate as a Transfer Certificate taking effect in accordance with Clause 26 of the Loan Agreement. |
8 | The Transferor: |
(a) | warrants to the Transferee and each Relevant Party that: |
(i) | the Transferor has full capacity to enter into this transaction and has taken all corporate action and obtained all consents which are in connection with this transaction; and |
(ii) | this Certificate is valid and binding as regards the Transferor; |
(b) | warrants to the Transferee that the Transferor is absolutely entitled, free of encumbrances, to all the rights and interests covered by the assignment in paragraph 4 above; and |
(c) | undertakes with the Transferee that the Transferor will, at its own expense, execute any documents which the Transferee reasonably requests for perfecting in any relevant jurisdiction the Transferee's title under this Certificate or for a similar purpose. |
9 | The Transferee: |
(a) | confirms that it has received a copy of the Loan Agreement and each of the other Finance Documents; |
(b) | agrees that it will have no rights of recourse on any ground against either the Transferor, the Agent, the Mandated Lead Arranger, the Security Trustee, any Lender or the Swap Bank in the event that: |
(i) | any of the Finance Documents prove to be invalid or ineffective; |
(ii) | the Borrower or any Security Party fails to observe or perform its obligations, or to discharge its liabilities, under any of the Finance Documents; |
(iii) | it proves impossible to realise any asset covered by a Security Interest created by a Finance Document, or the proceeds of such assets are insufficient to discharge the liabilities of the Borrower or any Security Party under the Finance Documents; |
(c) | agrees that it will have no rights of recourse on any ground against the Agent, the Mandated Lead Arranger, the Security Trustee, any Lender or the Swap Bank in the event that this Certificate proves to be invalid or ineffective; |
(d) | warrants to the Transferor and each Relevant Party that: |
(i) | it has full capacity to enter into this transaction and has taken all corporate action and obtained all consents which it needs to take or obtain in connection with this transaction; and |
(ii) | this Certificate is valid and binding as regards the Transferee; and |
(e) | confirms the accuracy of the administrative details set out below regarding the Transferee. |
10 | The Transferor and the Transferee each undertake with the Agent, the Mandated Lead Arranger and the Security Trustee severally, on demand, fully to indemnify the Agent and/or the Security Trustee and/or the Mandated Lead Arranger in respect of any claim, proceeding, liability or expense (including all legal expenses) which they or either of them may incur in connection with this Certificate or any matter arising out of it, except such as are shown to have been mainly and directly caused by the gross and culpable negligence or dishonesty of the Agent's, the Mandated Lead Arranger's or the Security Trustee's own officers or employees. |
11 | The Transferee shall repay to the Transferor on demand so much of any sum paid by the Transferor under paragraph 10 as exceeds one-half of the amount demanded by the Agent, the Mandated Lead Arranger or the Security Trustee in respect of a claim, proceeding, liability or expense which was not reasonably foreseeable at the date of this Certificate; but |
By:
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By:
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Date:
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Date:
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Name of Transferee:
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Lending Office:
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Contact
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(Loan Administration Department):
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Person
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Telephone:
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Fax:
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Contact
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(Credit Administration Department):
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Person
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Telephone:
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Fax:
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Account for payments:
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EXECUTED
as a
DEED
by
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)
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ULTRA ONE SHIPPING LTD
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)
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acting by two directors or one director
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)
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and the company secretary
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)
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Director:..................................................
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Director/Secretary::..................................................
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To:
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HSH Nordbank AG
Gerhart-Hauptmann-Platz 50 20095 Hamburg Germany |
(a) | the aggregate of the Minimum Liquidity amount standing to the credit of the Liquidity Account is $[ · ]; |
(b) | the aggregate of the Additional Minimum Liquidity amount standing to the credit of the Liquidity Account is $[ · ]; |
(c) | the ratio set out in Clause 15.1 is at [ · ] per cent.; and |
(d) | [list here any other applicable financial covenants from the Corporate Guarantee]. |
Chief Financial Officer
for and on behalf of Euroseas Ltd. |
Director
for and on behalf of Ultra One Shipping Ltd |
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Director
for and on behalf of Ultra One Shipping Ltd |
BORROWER
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||
SIGNED
by
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)
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Stefania Karmiri
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)
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/s/ Stefania Karmiri
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for and on behalf of
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)
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ULTRA ONE SHIPPING LTD
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)
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in the presence of:
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/s/
Panagiota Gemona
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PANAGIOTA GEMONA
ATTORNEY-AT-LAW WATSON FARLEY & WILLIAMS 348 SYNGROU AVENUE 176 74 KALLITHEA ATHENS-GREECE |
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||
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LENDERS
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||
SIGNED
by
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)
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Georgia Asimakopoulos
|
)
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/s/ Georgia Asimakopoulos
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for and on behalf of
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)
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HSH NORDBANK AG
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)
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|
in the presence of:
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)
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/s/
Panagiota Gemona
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||
SWAP BANK
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||
SIGNED
by
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)
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Georgia Asimakopoulos
|
)
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/s/ Georgia Asimakopoulos
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for an onbehalf of
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)
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HSH NORDBANK AG
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)
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|
in the presence of:
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)
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/s/
Panagiota Gemona
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||
AGENT
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||
SIGNED
by
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)
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Georgia Asimakopoulos
|
)
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/s/ Georgia Asimakopoulos
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for an onbehalf of
|
)
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HSH NORDBANK AG
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)
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|
in the presence of
|
)
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/s/
Panagiota Gemona
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||
MANDATED LEADLEAD ARRANGER
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SIGNED
by
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)
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Georgia Asimakopoulos
|
)
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/s/ Georgia Asimakopoulos
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for an onbehalf of
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)
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HSH NORDBANK AG
|
)
|
|
in the presence of
|
)
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/s/
Panagiota Gemona
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||
PANAGIOTA GEMONA
ATTORNEY-AT-LAW WATSON FARLEY & WILLIAMS 348 SYNGROU AVENUE 176 74 KALLITHEA ATHENS-GREECE |
SECURITY TRUSTEE
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||
SIGNED
by
|
)
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|
Georgia Asimakopoulos
|
)
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/s/ Georgia Asimakopoulos
|
for an onbehalf of
|
)
|
|
HSH NORDBANK AG
|
)
|
|
in the presence of
|
)
|
|
/s/
Panagiota Gemona
|
||
PANAGIOTA GEMONA
ATTORNEY-AT-LAW WATSON FARLEY & WILLIAMS 348 SYNGROU AVENUE 176 74 KALLITHEA ATHENS-GREECE |
· | Allendale Investment S.A., incorporated in Panama. |
· | Alterwall Business Inc., incorporated in Panama. |
· | Prospero Maritime Inc., incorporated in the Marshall Islands. |
· | Xingang Shipping Ltd., incorporated in Liberia. |
· | Manolis Shipping Ltd., incorporated in the Marshall Islands. |
· | Eternity Shipping Company, incorporated in the Marshall Islands. |
· | Pilory Associates Corp., incorporated in Panama. |
· | Tiger Navigation Corp., incorporated in the Marshall Islands. |
· | Noumea Shipping Ltd, incorporated in the Marshall Islands. |
· | Saf-Concord Shipping Ltd., incorporated in Liberia. |
· | Eleni Shipping Ltd., incorporated in Liberia. |
· | Pantelis Shipping Corp., incorporated in Liberia. |
· | Aggeliki Shipping Ltd., incorporated in Liberia. |
· | Joanna Maritime Ltd., incorporated in Liberia. |
· | Eirini Shipping Ltd., incorporated in Liberia. |
· | Ultra One Shipping Ltd., incorporated in Liberia. |
· | Ultra Two Shipping Ltd., incorporated in Liberia. |
· | Kamsarmax One Shipping Ltd., incorporated in the Marshall Islands. |
· | Kamsarmax Two Shipping Ltd., incorporated in the Marshall Islands. |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the Company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company's ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial reporting. |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the Company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company's ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial reporting. |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |